Pushing for Crypto Self-Regulation Amid Tightening Government Scrutiny

In the aftermath of the meteoric rise in crypto prices and the subsequent increase in global consciousness, the start of 2018 begun to see more serious government consideration of the market.

In early 2018, reports began to emerge of plans in South Korea and Japan to create self-regulating bodies for their crypto markets as a way of preempting stringent laws from the government.

In the United States, crypto exchange and custody giants like Coinbase, Bittrex and Kraken established the Crypto Rating Council in the end of September 2019.

Even members of regulatory agencies like "Crypto mom" Hester Peirce of the SEC and Brian Quintenz of the U.S. Commodity Futures Trading Commission have stated in the past that crypto businesses should develop modalities for self-regulation.

There is an argument to be made that these SROs are trying to become the crypto analogs of organizations like the National Futures Association - with the ability to promulgate important rules and guidelines ratified by government regulators.

"The crypto industry and regulators are trying to solve for regulatory uncertainty, and the U.S. Securities and Exchange Commission is taking a conservative approach while trying to define what is and is not a security. The SEC is looking to the industry to help come up with a sensible approach in conjunction with them, and a self regulatory organization."

The company has since moved the bulk of its crypto exchange business - i.e., the Poloniex platform - abroad.In late September 2019, reports emerged that the U.K.'s Financial Conduct Authority was looking to ban crypto derivatives.

Government agencies in some countries appear to be exerting ever-greater regulatory pressure on their local crypto industries.

Establishing a global crypto self-regulating bodyThus far, most of the efforts at crypto self-regulation appear contained in servicing local markets.

Gemini's Hussain also touched on the possible emergence of a unified SRO for the global crypto market, stating, "Currently, there is no precedent for a global SRO. However, many VCA members are part of SRO initiatives in other jurisdictions, which can provide a unified, consistent approach to self regulation across multiple jurisdictions."