Winklevoss-backed Virtual Commodity Association wants to help protect cryptocurrency consumers

Winklevoss-backed Virtual Commodity Association is seeking to become a self-regulatory organization (SRO) for the cryptocurrency industry, in a bid to run similarly like the Financial Industry Regulatory Authority (FINRA) and the National Futures Association.

According to a Medium post, the nonprofit, independent organization, which was set up in 2018, has gathered four major cryptocurrency exchanges including Gemini, bitFlyer, Bittrex, and Bitstamp that will be governed by a Board of Directors.

The association has also formed six committees, led by industry subject matter experts, to prepare framework that will delineate industry-wide best practices and standards concerning Bank Secrecy Act/Anti Money Laundering (AML) and Know Your Customer (KYC) controls, custody and security issues, enforcement processes, insurance standards, market integrity, and taxation.

“These committees directly address the concerns of regulators that are trying to figure out the crypto space,” Yusuf Hussain, VCA President, told CoinDesk.

He added that VCA aims to expedite cross-market information sharing and prevent market manipulation and other fraudulent activities in real-time. However, he made clear that the organization is simply a “supplement to traditional regulatory bodies” and not a replacement.

“The VCA is grateful to the individuals and companies willing to commit their time towards these committees and advance the goals of the VCA in fostering consumer protection and market integrity for the virtual currency industry,” Hailey Lennon, VCA Secretary, said.

As previously reported, cryptocurrency exchange Gemini is eyeing to obtain a broker-dealer license from FINRA to make the Winklevoss-owned company an alternative trading system that enables to trade securities and allows trading securities listed on other platforms.

While earlier reports said an attempt to secure a license may take some time as the organization remains cautious in approving licenses, FINRA and the SEC released a joint statement recently to explain and clarify the broker-dealer custody of digital asset securities.