The Virtual Commodity Association (VCA) Taps Exiger to Recommend Market Integrity Standards for Cryptocurrency Exchanges and Custodians

Thursday, July 11, 2019

VCA Working Towards SRO Designation to Help America's Crypto Investors

New York, July 11, 2019

The Virtual Commodity Association (VCA), a non-profit organization of cryptocurrency exchanges and custodians working to establish a self-regulatory organization (SRO) designation for U.S. cryptocurrency marketplaces, today announced the launch of six committees, two special advisors, and leadership appointments to help set standards, sound practices, and oversight to self-regulate cryptocurrency marketplaces.

The VCA is currently comprised of cryptocurrency exchanges bitFlyer, Bittrex, Bitstamp and Gemini. The group’s goal of receiving SRO designation will be to formalize its broader mission to help protect America’s cryptocurrency investors.

The VCA has established six committees to address industry challenges identified by the regulatory community: Bank Secrecy Act (BSA)/Anti-Money Laundering (AML), Custody and Security, Enforcement, Insurance, Market Integrity, and Tax. Each committee will be led by an expert from its respective industry and establish frameworks for best practices.

“By establishing these committees, the VCA is highlighting key issues facing cryptocurrency exchanges and charting a way forward,” said Maria Filipakis, Interim Executive Director of the VCA. “I am profoundly grateful to the experts who have come together to lead this initiative.”

The VCA has also appointed Yusuf Hussain, Head of Risk at Gemini Trust Company, LLC, as Board of Directors’ President and Hailey Lennon, Esq., Head of Legal and Regulatory Affairs at bitFlyer USA, Inc. as Board of Directors’ Secretary.

“Several regulatory agencies have called upon our industry to provide better oversight and surveillance of cryptocurrency markets. Today the VCA has stood up six committees — including one dedicated to market integrity [led by Exiger's Michael Roe] — that will address these concerns, while beginning to create a regulatory framework for virtual commodity marketplaces. These committees will adopt best practices and standards commonplace in traditional financial markets,” said Yusuf Hussain, President of the VCA [read announcement here].

Special Advisors — Ellen Zimiles and Alma Angotti (Navigant Consulting, Inc.) and Dana Syracuse (Perkins Coie, LLP) — will work with and advise all committees.

The six committees and leads include:

  • BSA/AML — led by Michael Carter (Alvarez & Marsal) to apply Bank Secrecy Act BSA/AML and Know Your Customer (KYC) controls, including blockchain analytics, transaction monitoring and investigations.
  • Custody and Security — co-led by Adam Cohen (Redgrave LLP) and Nicole Becher with a focus on implementing and maintaining current best practices for cryptocurrency custody, which is based heavily on cryptographic principles.
  • Enforcement — led by Philip Moustakis (Seward & Kissel, LLP) to enforce the regulatory framework established by the VCA, keeping the VCA members accountable. This includes maintaining a system of marketplace conduct rules, implementing policies and procedures, and responding to and addressing customer concerns and complaints.
  • Insurance — co-led by Matthew Gaul (Mayer Brown, LLP) and Alexander Sand (Eversheds Sutherland US, LLP) to establish minimum, appropriate insurances and coverages for cryptocurrency exchanges and custodians.
  • Market Integrity — led by Michael Roe (Exiger), to facilitate cross-market information sharing, consolidated audit trails and cross-market surveillance to detect and deter manipulative and fraudulent activity [read more here]
  • Tax — leader announcement forthcoming, will focus on establishing tax framework and interpreting and establishing tax code law as it relates to cryptocurrency trading.

“The VCA is grateful to the individuals and companies willing to commit their time towards these committees to help advance the goals of the VCA in fostering consumer protection and market integrity for the virtual currency industry,” said Hailey Lennon, Secretary of the VCA.

 For more information, please read coverage in Coindesk.

 

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About Exiger

 

Exiger is a global regulatory and financial crime, risk and compliance company. Exiger arms financial institutions, multinational corporations and governmental agencies with the practical advice and technology solutions they need to prevent compliance breaches, respond to risk, remediate major issues and monitor ongoing business activities. Exiger works with clients worldwide to assist them in effectively managing their critical challenges while developing and implementing the policies, procedures and programs needed to create a sustainable compliance environment. A global authority on regulatory compliance, the company also oversees some of the world's most complex court-appointed and voluntary monitorships in the private and public sectors. Exiger has four principal business units being: Exiger Advisory; Exiger DiligenceExiger Government Services; and Exiger Tech, including AI-based automated due diligence solutions DDIQand Insight 3PM. Exiger operates through offices in New York City, Silver Spring (DC Metro), Toronto, Vancouver, London, Bucharest, Hong Kong, and Singapore.

 

Contacts

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Kody Gurfein

+1 212 455 9408

kgurfein@exiger.com

 

Dana Mirman

917.583.0777

dana@markallenco.com

 
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Michael Roe, Managing Director

Michael Roe is a Managing Director based in Exiger's New York office, where he focuses on the firm’s regulatory and financial crime compliance matters. He has served as one of Exiger’s leaders engaged on the Monitorship of HSBC, and separately as the sanctions subject matter expert responsible for reviewing and reporting on all aspects of the sanctions compliance program of a major global financial institution. A veteran specialist in anti-money laundering (AML), Michael brings more than two decades of corporate compliance and legal experience to the Exiger team.