Digital currency exchange Gemini’s founders, Tyler and Cameron Winklevoss have long been proponents of Bitcoin, and the cryptocurrency industry. As early investors, they stand to gain from ensuring its longevity and success. For that to happen, the Winklevoss twins know that regulation must occur, and have proposed a cryptocurrency self-regulatory organization (SRO) to take the lead in establishing sensible regulations for the industry and market.
In a statement published on Gemini’s official blog, the investor duo states: “we believe in the importance of thoughtful regulation in the virtual currency industry.” The statement further lists the ways Gemini has been shown their commitment to following both internal policies and rules laid out by the Commodity Futures Trading Commission (CFTC) and the Cboe Futures Exchange (CFE).
The purpose of the self-regulatory board would be to “foster financially sound, responsible, and innovative virtual commodity markets”, “incentivize the detection and deterrence of manipulative and fraudulent acts and practices,” and “require member firms to comply with sound practices” and “provide a sanctions-based accountability program.” Sound practices, as mentioned above, consist of “responsible financial management,” “transparency,” “record keeping”, “cyber security”, “cooperation's with regulators,” and more.
The proposal outlines that the entity will be governed by a board of directors, and membership is open to all OTC trading firms, exchanges, and other virtual commodity trading platforms.
The statement ends with the Gemini founders asserting that they “believe a thoughtful SRO framework that provides a virtual commodity regulatory program for the virtual commodity industry is the next logical step in the maturation of this market.”
CFTC Commissioner Brian Quintenz has often called for the creation of a crypto-focused SRO and has congratulated the Winklevoss twins for their “thoughtful approach” to regulating the cryptocurrency market. Quintenz said:
"Ultimately, a virtual commodity SRO that has the most independence from its membership, the most diversity of views, and the strongest ability to discover, reveal, and punish wrongdoing will add the most integrity to these markets. I encourage Gemini (or any other market participant, advocacy group, platform, or firm) to be aggressive in promoting these qualities within any SRO construct.”
With the CFTC’s support, and an industry in dire need of regulation, we fully expect more information on the Winklevoss-proposed SRO in the coming weeks.