Gemini crypto exchange launching crypto working group

Gemini
co-founders Tyler and Cameron Winklevoss arrive at the Met Gala
in New York
Thomson
Reuters

• A group of cryptocurrency exchanges including the
  Winklevoss brothers’ Gemini are teaming
  up to form a new working group. 
• The hope is that it could bring to fruition new
  industry standards that currently don’t exist for crypto and
  could make large investors more comfortable with the nascent
  market, market observers say. 

A group of crypto exchanges is teaming up to form a task force
that could bring the crypto markets to the next level. 

The Winklevoss brothers’ Gemini and three other
exchanges announced on Monday the creation of a new group
called the Virtual Commodity Association Working Group,
which could be a precursor to the formation of a
self-regulatory organization or SRO for digital commodities like
bitcoin and ethereum. 

The hope is that it could bring to fruition new industry
standards that currently don’t exist for crypto and make large
investors more comfortable with the nascent market, market
observers say. 

In equities, securities exchanges have their own
organization to come up with common standards and jointly respond
to declarations by regulators.
The new group could
serve as the equivalent for the crypto world, by coming up
with best practices for the industry, looking at ways to
boost liquidity and stamping out market manipulation, according
to a person familiar with the group. 

“It is a great sign that multiple competing exchanges have
recognized that working together, to improve the overall
industry, in their mutual self interest,” Dave Weisberger, the
founder of CoinRoutes, told Business Insider. 

Patrick Rooney of Trading Technologies said the formation
of such a group would help regulators engage with the crypto
world. 

“I’m sure D.C. would like to have a common voice speaking
for them so it’ll certainly benefit communication to regulators
as well as the trading community,” he said. 

Aside from Gemini other exchanges in the group
include Bitstamp, Bittrex, and bitFlyer USA. 

Still, it is early days for the group that only includes a
handful of exchanges and notably excludes Coinbase, the largest
crypto exchange in the US. A spokesman for Coinbase declined to
comment on the group. 

The group’s first meeting will be held in
September. 

The opaqueness of the crypto markets is one problem the
group could solve. In crypto, the price of different digital
assets trade at widely different prices and there is no common
host to audit all market data. In equities, stock exchanges are
developing the so-called Consolidated Audit Trail to allow
regulators and market participants to better track activities in
US equities. The working group could develop a similar project,
the person familiar with the group said.

“Institutions are genuinely skeptical today over the
fairness and data quality in the crypto market,” Weisberger
added. “At CoinRoutes, even though we help our clients
consolidate the data, there is a lot of concern over the quality
of the exchange data we aggregate as well as underlying
manipulation. 
An industry SRO is a great start
towards ameliorating those concerns.”

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