A group of institutional cryptocurrency traders is calling for the creation of a blacklist of counterparties known to revoke trades and engage in criminal activity, as reported by Bloomberg on May 9, 2019.
Trading Firms Take Regulation in Their Own Hands
The crypto market, while attracting the top technological experts and developers, has become a breeding ground for scams and nefarious activity. The latest happening was on May 8, 2019, when Binance was hacked for 7,000 BTC ($40 million). As it stands, there has been a lot of litigation against crypto businesses in the last year, with Bitfinex topping headlines for the last two weeks.
Crypto OTC Roundtable Asia (CORA), which gathered in Chicago, saw 35 digital asset trading firms sit behind closed doors to discuss the ongoing regulatory climate and how to bring an air of legitimacy to crypto markets. The event involved some of the largest market makers from Asia to North America and highlighted the desire of these companies to impose ethical boundaries and rules from traditional markets in crypto.
A senior trader at Galaxy Digital stated it is important for crypto trading firms to establish a willingness to cooperate and work toward common standards to be adhered by all market participants. While progress on that front isn’t being rushed, these firms believe initiatives like CORA help bridge the gap between cryptocurrency and traditional finance – something they feel is essential to adoption and growth.
Is this a Viable Solution?
In the mind of a cypherpunk, no entity or association of powerful and wealthy persons get together for anything other than their own self purpose. Bitcoin was created to bypass the carnage caused by a cartelized financial industry; bringing rules to impose the same on crypto markets would be subjected to widespread contempt in the community.
It is unlikely that blockchain evangelists will approve of such an initiative as it essentially limits cryptocurrency trading to those approved by a centralized group of influential traders. However, the intent is admirable as it shows the will to eradicate erroneous trading activity in the industry. A better solution is likely to present itself through the cryptocurrency community rather than a group of traders who conduct private meetings.