Winklevoss twins propose self-regulatory body for cryptocurrency industry

As regulation of the cryptocurrency industry intensifies, a prominent bullish duo has proposed one way to disabuse critics of the notion that the nascent sector represents a Wild West of investing.

Cameron and Tyler Winklevoss, who founded digital-currency exchange Gemini, are putting forward a framework for self-regulation of the virtual-currency sector called the Virtual Commodity Association (VCA).

In a blog post, the Winklevoss twins say a dearth of regulation and the need for change as the market attempts to evolve, has prompted them to push for the industry to adopt broad practices around responsible financial management, transparency, cybersecurity and record-keeping. The twins also say self-regulation doesn’t preclude the need to work along side regulators.

‘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. We 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.’

The proposal comes as the Securities and Exchange Commission has warned that it is taking a hard look at exchanges, threatening to crack down on cryptocurrency platforms.

“If a platform offers trading of digital assets that are securities and operates as an ‘exchange,’ as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration,” the SEC said.

In the past, the Winklevoss twins have said that they believe bitcoin has the potential to disrupt the gold GCJ8, +0.12%  market, with the value of a single bitcoin potentially hitting $320,000.

Bitcoin emerged out of obscurity—the remit of illicit transactions and technophiles—and in to the mainstream spotlight in 2017. However, that heightened attention hasn’t helped propel the No. 1 digital currency, bitcoin BTCUSD, +1.78% to new heights in 2018, with the asset shedding about half its value since hitting an all-time peak near $20,000 in late December.