The Winklevoss twins have submitted a proposal to create an industry-sponsored self-regulatory body that would police the cryptocurrency market.
In a company blog post, the brothers, who run U.S. registered Gemini Exchange for bitcoin and ether trading, outlined a proposal for the Virtual Commodity Association (VCA), which would monitor the U.S. digital currency market.
The aim of the non-profit regulatory body would be to work with regulators such as the U.S. Commodity Futures Trading Commission (CFTC) or the U.S. Securities and Exchange Commission (SEC), promote financially sound and innovative virtual commodity markets, and deliver transparency.
“The promise of virtual commodities and their impact on the future will be profound – but individuals and institutions need to feel safe and secure when transacting,” the brothers said. “We believe a thoughtful SRO [self-regulatory organisation] framework that provides a virtual commodity regulatory program for the virtual commodity industry is the next logical step in the maturation of this market.”
In response to the twins proposal, Brian Quintenz, CFTC Republican Commissioner, has praised their plan. In a statement he said:
“I congratulate Cameron and Tyler Winklevoss on their energetic leadership and thoughtful approach in outlining a virtual commodity self-regulatory organisation (SRO) concept.”
According to Quintenz, a digital commodity SRO that has the ‘the strongest ability to discover, reveal, and punish wrongdoing will add the most integrity to these markets,’ adding:
“I encourage Gemini (or any other market participant, advocacy group, platform, or firm) to be aggressive in promoting these qualities within any SRO construct.”
The VCA would be open to membership to virtual commodity platforms, over-the-counter (OTC) trading firms, and other trading facilities acting as counterparties that cater to U.S. residents. Members will be required to follow rules related to cybersecurity, surveillance, information sharing, cooperation with regulators, and transparency. Failure to do so may result in sanctions.
This news comes at a time when the brothers have revealed that their main goal for 2018 is to expand their exchange by offering more tokens such as BCH and litecoin. Earlier this month, it was reported that Cboe, a Chicago-based registered exchange, signalled its support to provide futures contracts on other cryptocurrencies. As Gemini is partnered with Cboe Global Markets Inc., it’s hoping to receive help from the twins.
Given that the Gemini Exchange already offers ethereum, Cboe has yet to add that; however, by expanding on the tokens Gemini can deliver to include those of BCH and litecoin, this would pitch it against fellow U.S. rival Coinbase. This could help to push prices up, which has been the case when Coinbase has added new tokens to its platform.