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A working group led by cryptocurrency exchange Gemini will hold its first meeting in September to discuss forming a self-regulatory organization (SRO) to oversee the burgeoning U.S. crypto trading market.

Announced on Monday, the Virtual Commodity Association (VCA) initially includes participation from four cryptocurrency exchanges that serve U.S. customers: Gemini, Bitstamp, Bittrex, and bitFlyer USA.

Representatives from these firms will meet in September to discuss forming an SRO, which will include drafting best practices for the industry and determining guidelines for membership in the VCA. They will also choose an executive director for the organization.

“This is the first of many steps in policing the digital asset markets and answering the call of regulators,” said Yusuf Hussain, head of risk at Gemini.

“We believe in the value of self-regulation, which we pursued in Europe almost from our inception, and look forward to following a similar path in the U.S. Those that can’t or won’t comply with regulations put consumers – and their own operations – at risk,” added Bitstamp CEO Nejc Kodrič

In the meantime, the VCA’s interim executive director is Maria Filipakis, who formerly served as executive deputy superintendent at the New York Department of Financial Services (NYDFS) and helped draft the agency’s controversial cryptocurrency regulatory framework, commonly referred to as the “BitLicense.”

“I applaud the VCA and its members in their commitment to strengthen the digital asset industry’s regulatory landscape, rules for the protection of customers, and bring forth industry setting best practices and market transparency,” Filipakis said.

Notably absent from the VCA’s list of initial members is Coinbase, which according to market research firm Bernstein accounts for half of all U.S. cryptocurrency trading and was one of the first exchanges to receive a BitLicense. The San Francisco-based company did not immediately respond to a request for comment.

As SEC Slaps Down Bitcoin ETF, Industry Wants to Show it’s Grown up

Jay Clayton SEC
The SEC, which is led by Chairman Jay Clayton (right), has not yet approved a bitcoin ETF, though there are several applications on its desk. | Source: YouTube/Brookings

Gemini, which was founded by brothers Cameron and Tyler Winklevoss, first proposed the VCA in March, arguing that “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.”

At the time, the proposal earned praise from sitting CFTC Commissioner Brian Quintenz, who published a statement of support on the regulatory agency’s official website.

The formation of the VCA follows the SEC’s recent announcement that it had denied the Winklevoss twins’ second attempt to create a bitcoin ETF. By establishing an SRO, industry exchanges likely aim to signal that the industry is mature enough to warrant exchange-traded products (ETPs).

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