A group of cryptocurrency exchange houses operating in the United States created the Virtual Merchandise Association (VCA), with the aim of achieving self-regulation of the cryptoactive market in the country in the face of pressures imposed by regulatory bodies such as the U.S. Commodity Futures Trading Commission – CFTC and Securities and Exchange Commission – SEC.
On Monday, a press release was published announcing the creation of the VCA. Its main objective would be to avoid fraud and manipulation in the cryptocurrency market. It is expected that an inaugural meeting of the Association will take place in September, bringing together BitFlyer, Bittrex, Gemini and Bitstamp exchange houses, a company that operates in Europe and could enter the North American market through this association. These exchange houses are located in positions 15, 23, 31 and 34 respectively of the list of the 100 platforms with the highest exchange volume in CoinMarketCap .
According to the statement, the VCA will work with the Commodity Futures Trading Commission of the United States ( CFTC ). In the month of June, the CFTC announced that it would undertake an investigation to the exchange houses (including Bitstamp), for a possible manipulation of the market that would seek to determine the price of bitcoin futures.
In this sense, the conformation of the VCA could respond to the growing governmental pressure regarding the regulation of cryptoactives and the controversy generated in this regard. A precedent was established in Japan, when exchange offices were investigated after the hack to Coincheck and the authorities took more stringent measures, which prompted the formation of an association that aims to self-regulate the market and protect users.
Yusuff Hussain, Gemini’s risk manager, said: “This is the first of many steps to answer the call of the regulators”
The VCA will seek the creation of a self-regulatory organization (SRO) that monitors the behavior of the cryptoactive market to develop industrial standards and promote transparency in the cryptocurrency market. Self-regulation from some crypto-market agents could be favorable, although it is not clear how the VCA will determine the industry standards for the cryptocurrency trade .
Nejc Kodrič, CEO of Bitstamp, believes that the VCA will provide “another element of protection to consumers”, although he did not specify how this would be achieved, adding that the exchange bureaus must comply with the regulations to stay in operations.
The executive director of the VCA will be Maria Filipakis, who served as Deputy Superintendent in the Department of Financial Services of New York (DFS). In that institution, Filipakis helped the establishment of DFS regulations for cryptocurrencies.
After a long controversy to determine what kind of traditional assets should be classified as cryptocurrencies and what kind of regulations should be applied, in October 2017 the CTFC recognized cryptocurrencies as commodities or commodities, hence the VCA intends to operate in the United States. However, in some countries cryptocurrencies are not considered commodities (commodity). A merchandise is any product that can be bought and sold. For these buying and selling actions, users must pay certain taxes.
Depending on the legislation and the country , certain cryptocurrencies may be considered merchandise, or not. It is usual that the main cryptocurrencies such as Bitcoin and Ether are considered as merchandise. In other cases, some tokens are considered as financial values , because they promise a future gain.
To date there is no global agreement in this regard, so the VCA initiative would only apply in those cases in which cryptocurrencies are considered as merchandise. The members of the European Union, for example, consider cryptocurrencies as a payment method since 2015, so they are exempt from VAT.
