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Regulation

Group working to create virtual currency self-regulatory organization

A group of digital exchanges announced Monday is working to establish an industry-sponsored, self-regulatory organization to oversee virtual commodity marketplaces.

Participants in the working group of the Virtual Commodity Association include Bitstamp, bitFlyer USA, Bittrex and Gemini Trust Co. The VCA was created by Gemini Trust co-founders Cameron and Tyler Winklevoss. The group named Maria Filipakis as its interim executive director. Ms. Filipakis, a former executive deputy superintendent with the New York Department of Financial Service, helped draft that agency's regulations on virtual currency.

At its first meeting in September, the group plans to discuss membership guidelines, best practices including conflicts of interest, client communications, client disclosures, record keeping and board appointments. The group "welcomes indications of interest from other organizations that would seek to participate," it said in a statement.

Yusuf Hussain, head of risk for Gemini Trust, said in the statement that the move "is the first of many steps in policing the digital asset markets and answering the call of regulators."

Commodity Futures Trading Commission commissioner Brian Quintenz welcomed the group's efforts to create a SRO, which "given the absence of federal oversight jurisdiction in the crypto market … could have a meaningful impact on the integrity and credibility of this young marketplace," he said in a statement.