As they seek to gain acceptance by regulatory authorities, cryptocurrency exchanges in these two countries are banding together and opting to self-regulate.
Yesterday, February 13, 2018, it was reported that the collective exchanges that make up the Blockchain and Cryptocurrency Committee (BACC) of the Internet and Mobile Association of India will be submitting transaction data to a government panel this week. Meanwhile, European exchanges have formed the CryptoUK consortium as they attempt to create a code of conduct for the industry.
The BACC is gathering information related to trading activities among its seven member exchanges. Disclosure requirements demand that cryptocurrency traders in India provide specific details in order to open accounts with the exchanges, including government-issued PAN and Aadhar card numbers as well as banking credentials. The committee now intends to share the pooled data they’ve collected on their traders with authorities in a show of transparency. A response is expected from the panel by next month.
The move was announced after Finance Minister Arun Jaitley’s contention that the government will not recognize cryptocurrency as a form of legal tender or as part of a payment system. A statement which led many in the country who held digital assets to panic sell.
In the UK, exchanges BlockEx; CEX.IO; Coinbase; CoinShares; CommerceBlock; CryptoCompare; and eToro have banded together to form CryptoUK, a consortium focused on establishing an industry-wide code of conduct:
• “Appropriateness checks to ensure that investors are fit and proper to undertake transactions;
• Due diligence checks on platform users to protect against illegal activity;
• Segregating fiat customer from company funds, and to ensuring customer funds are payable upon an insolvency event;
• Ensuring communications with customers is fair, clear and not misleading;
• Proactive disclosure of clear information on pricing, leverage and fees and any associated risks;
• A requirement on the use of ‘cold’ wallets where appropriate.”
Chair of CryptoUK Iqbal V Gandham made a point to distance CryptoUK from notions that it represents initial coin offerings. “This is a severely misunderstood sector that has great potential to improve our society. But we are hearing instances of rogue operators and consumer harm,” said Gandham. “That’s why CryptoUK has been established: to promote best practice and to work with government and regulators to ensure that the UK benefits from the exciting potential of this international technology.”
According to Gandham, the code will continue to be improved on and refined as members work together with policymakers.
The BACC is also planning to create a code of conduct for cryptocurrency exchanges, which will encompass KYC and AML practices.
“These exchanges don’t deal with cash and will adopt the best practices applicable for the banking industry,” said the committee’s head, Ajeet Khurana. “Though the government has specified that cryptocurrencies are not legal tender, we hope to present to the government committee that people can still trade in them like they do in ‘stock or gold.'”
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