Winklevoss’ Gemini Teams Up with 3 Big Exchanges to Form Self-Regulatory Group

Four cryptocurrency exchanges, including Gemini – the one founded by the Winklevoss brothers, is purportedly setting up a working group to bring new industry standards.


Virtual Commodity Association Working Group (VCAWG)

The Winklevoss twins’ cryptocurrency exchange Gemini is teaming up with three other exchanges to form a new self-regulatory organization (SRO) dubbed the Virtual Commodity Association Working Group. The exchanges in the newly formed organization, besides Gemini, are Bittrex, bitFlyer USA, and Bitstamp.

Securities exchanges in equities markets have their very own organization which comes up with the common standards for the industry and responds to declarations by regulators. The hope is that the new cryptocurrency working group will work in a similar way, hence making institutional investors more likely to get involved in the market.

Speaking on the matter was Dave Weisberger, founder of CoinRoutes, who noted:

It is a great sign that multiple competing exchanges have recognized that working together, to improve the overall industry, in their mutual self-interest.

Patrick Rooney of Trading Technologies, on the other hand, notes that an organization of the kind could bridge the communication between regulators and the industry itself.

“I’m sure D.C. would like to have a common voice speaking for them so it’ll certainly benefit communication to regulators as well as the trading community,” he said.

Not the First One

VCAWG is not the first organization of the kind in the field. Back in April, the 16 registered cryptocurrency exchanges in Japan came together to launch the Japan Cryptocurrency Exchange Association (JCEA).

The group is responsible for the self-regulation of the cryptocurrency exchange platforms in the country. One of their most serious moves was to propose margin capped trading rules for the cryptocurrency market in an attempt to reduce the risks of high volatility.

How will South Korea Regulate?

One of the challenges that the newly formed SRO is likely to attempt to tackle is the opaqueness of the cryptocurrency market. As it stands, the prices of different digital assets are different on the different platforms. There is also no common host which can audit all the market data. According to Weisberger, the newly-formed organization might be able to solve this issue:

Institutions are genuinely skeptical today over the fairness and data quality in the crypto market. […] At CoinRoutes, even though we help our clients consolidate the data, there is a lot of concern over the quality of the exchange data we aggregate as well as underlying manipulation. An industry SRO is a great start towards ameliorating those concerns.

What do you think of an industry-specific SRO? Don’t hesitate to let us know in the comments below!


Images courtesy of Shutterstock

IBM Applies for Blockchain Patent to Ensure Transaction Compliance via Nodes Data

Tech giant IBM has applied for a blockchain patent for the development of transaction data identifiers based on nodes, according to a patent document published by the U.S. Patent and Trademarks Office (USPTO) Aug. 16.

The system described in the patent, entitled “Node Characterization in Blockchain,” intends to introduce a method of data extraction from nodes on a blockchain network in order to identify different types of transactions. Specifically, any operation on blockchain may possess a node or a number of nodes that can carry useful information about the character of transactions.

According to the document, the described specification would extract a range of characterization types such as “entity extraction, text mining, information analysis and discovery, compliance, semantic extraction, and ontology based entity discovery.” Such a manner of data extraction would allegedly empower regulatory authorities with a due level of monitoring the security of data on blockchain.

For example, the system proposes an anti-money laundering (AML) method by detecting whether a node performs a suspicious activity on blockchain while proceeding a crypto transaction, such as violation of daily transfer limits or involvement of a tracked entity.

The described system is deployed with modules that can be implemented as programmable hardware devices such as gate arrays, array logic, or graphic processing units, as well as hardware circuits.

Earlier today, Cointelegraph reported that the U.S. bank holding company Capital One has applied for a patent for blockchain-powered user authentication to assist the regulatory process of major security requirements, such as Know Your Customer (KYC).

On Aug. 14, a patent application by major U.S. crypto trading and wallet platform Coinbase for boosting the security of Bitcoin (BTC) payments was released, particularly addressing issues associated with the theft of users’ private keys from their wallets.

Thai SEC Clears Seven Cryptocurrency Operators to Serve Clients, Reviews Two More

Thai regulators announced Thursday, August 16, that they have so far approved seven business entities to conduct cryptocurrency operations as part of the formalization of the country’s domestic market.

In a statement, Thailand’s Securities and Exchange Commission (Thai SEC) confirmed Bitcoin Co. Ltd. (BX), Bitkub Online Co. Ltd., Cash2coins Co. Ltd., Group Co. Ltd. (TDAX), and Coin Asset Co. Ltd. were able to operate as legal cryptocurrency exchanges.

In addition, the regulator approved two cryptocurrency dealers: Coins TH Co. Ltd. and Digital Coin Co. Ltd. (ThaiWM).

The move forms part of a package of “transitional” rules governing crypto businesses operating in Thailand prior to the first tranche of regulations that came into force May 14.

As Cointelegraph reported, those entities continue serving customers while applying and waiting for a full license by notifying the Thai SEC within 90 days of the May deadline.

“In addition, the SEC is currently reviewing the data of two other digital asset operators that have filed an application under the Transitional Provisions,” the statement continues.

Last week, the SEC had also revealed heavy interest from prospective Initial Coin Offering (ICO) issuers in applying for regulated status in Thailand.

Over 50 projects had come forward, the regulator having previously outlined prerequisites needed to be fulfilled in order to be considered for approval. As of June, however, only five applicants had met those prerequisites.