“It’s about recognizing that you need entities that are focused on a fair and orderly system, and trying to prevent the abuses that can happen if you don’t pay attention,” said Kathy Kraninger, vice president of regulatory affairs at Solidus Labs and former director of the Consumer Financial Protection Bureau.
The new alliance and commitment come at a time when regulators remain concerned about the safety of the new market for investors, despite its growing popularity. The Securities and Exchange Commission has cited the potential for market manipulation as one of the main reasons for rejecting several bitcoin spot ETF applications.
Recently, the markets regulator vetoed a proposal by Fidelity’s Wise Origin Bitcoin Trust to offer an ETF (exchange-traded fund) to track the cryptocurrency, determining that it did not meet rules designed to prevent fraudulent and manipulative practices. .
In December, the Bank for International Settlements called for more regulatory safeguards to prevent cryptocurrency fraud, arguing that limited anti-money laundering enforcement coupled with transaction anonymity exposes DeFi ( decentralized finance) to illegal activities and market manipulation.
While this new commitment is an important acknowledgment of the potential for fraud in the cryptocurrency space, it remains unclear how the decentralized finance industry can curb bad actors.
The other founding members of the coalition are CrossTower, BitMex, GSR, Bitstamp, Elwood, CryptoCompare, Securrency, MV Index Solutions, the Digital Chamber of Commerce, Global Digital Finance, and CryptoUK.
By Hannah Lang, from Reuters agency.
Source: Ambito
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