Winklevoss Twins Call for Creation of Cryptocurrency SRO-Like Entity

Cameron and Tyler Winklevoss, the twins best known for operating digital-‎currency exchange Gemini, have called operators in the cryptocurrency space to ‎consider establishing a self-regulatory body called the Virtual Commodity Association (VCA).‎

The two backers of virtual currencies are seeking to bring the digital ‎asset class into the investing mainstream through an “SRO-like” entity — if they ‎win the approval of the US regulators‏.‏

In a blog post, the Winklevoss twins submitted a proposal to adopt self-regulatory ‎standards and industry-wide best practices to policing the new space amid ‎the authorities and government mulling further possible regulatory action.‎

Citing the success of SROs in the ‎United Sates, the brothers advocated for the creation of a private, independent organization according to the ‎following rules:

“The VCA: (i) will be a non-profit, independent regulatory organization that ‎does not operate any markets, (ii) will not be a trade association, (iii) will not ‎provide regulatory programs for security tokens or security token platforms, ‎and (iv) will be in compliance with global standards and best practices for ‎SROs.”‎

In remarks posted on Gemini’s website, the twins, that participated in the history of Facebook, addressed the issue of the proliferation ‎of cryptocurrencies and ICO campaigns. They described various oversight and regulatory ‎challenges including jurisdictional limitations that restrict CEA and CFTC authority over spot markets.‎

They wrote: “The purchase and sale of commodities in the spot/cash ‎markets has been historically exempt from the CEA and CFTC jurisdiction ‎because cash market transactions, unlike derivative contracts, are: (i) ‎traded for immediate delivery, (ii) settle “on the spot,” and (iii) are often ‎underpinned by a commercial purpose (i.e., a farmer selling grain). As a ‎result, these transactions are typically found to not be speculative in nature ‎or readily susceptible to manipulation.”‎

The proposed organization will require member firms to commit in writing to ‎operating their offerings in compliance with sound practices and “provide a ‎sanctions based accountability program to compel ongoing member ‎compliance.”‎

The VCA will be open for membership to virtual commodity platforms, over-‎the-counter trading firms, and other trading facilities acting as ‎counterparties.

(Photo: Wikimedia Commons)

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