Crypto Companies Launch Self-Regulatory Body
Share this article
While some call for regulatory clarity, a group of leading companies have taken it upon themselves to set the bar for the nascent cryptocurrency industry. The Association for Digital Asset Markets, or ADAM, was launched today by ten leading financiers of the crypto-space, in order to establish comprehensive industry standards and market rules.
In a joint press release, ADAM was described as “the first broad-based organization of its kind in the United States” to develop standards for the digital asset ecosystem.
The new association will work with regulators to establish standards for the rest of the industry, including ethical and professional guidelines to protect investors from fraud, and safety standards to protect assets in custody. It will also create rules governing clearance, settlement, and transparency in order to establish a “fair and orderly” marketplace for digital assets.
“Rules are fundamental to the development of any market,” said Duncan Niederauer, former CEO of the New York Stock Exchange, who will join ADAM as a member of its Advisory Board.
“Over 200 years ago, market leaders came together to draft rules that led to the creation of the New York Stock Exchange,” Niederauer said. “The advent of digital assets requires a similar effort; one that will clarify existing rules and give both investors and regulators the confidence necessary to sustain this market.”
The founding companies including leading figures in the world of crypto-finance, like Paxos and Galaxy Digital.
Self Regulation Makes Things Easier For Real Regulation
ADAM appears to be geared towards addressing the long-lasting perception that crypto markets are heavily manipulated, behind opaque exchanges with very limited operational security. Hacks remain endemic, and several leading exchanges have been accused of cooking their orderbooks.
The launch of a self-regulatory body may help gain clearance from government regulators as well. On the same day as ADAM launched, SEC Chairman Jay Clayton told a packed audience of crypto investors that these shady dealings were preventing ETFs and other financial products from securing regulatory approval.
“What investors expect is that trading in the commodity that underlies that ETF makes sense and is free from the risk of manipulation,” Clayton said at Consensus: Invest, hosted by CoinDesk in Manhattan. “It’s an issue that needs to be addressed before I would be comfortable.”
“We’ve seen some thefts around digital assets that make you scratch your head,” Clayton said, before adding: “Get your act together.”
It’s not clear if ADAM will be able to smooth the entrance for cryptocurrency financial products. But the joint collaboration of ten major firms may be the industry’s most concerted effort yet to “get its act together.”
The author is invested in digital assets.
Share this article
