Shaping the Future of Crypto Market Integrity

Solidus Labs
June 25, 2019

From day one, we knew that our mission — combating crypto manipulation and creating safer, more fair, more transparent and more credible crypto markets — is not a one person, or one company, job. Therefore, joining the Global Digital Finance community as Founding Members and Advisory Board Members was a natural fit for Solidus.

Established as an industry membership body that promotes the adoption of best practices for cryptoassets and digital finance, GDF has been successful not only in bringing together leading firms but, also in generating actual results — a constantly evolving and increasingly adopted industry Code of Conduct is the foremost of them. It is no surprise that GDF’s membership is constantly growing and that influential finance industry institutions like FATF, GFIN and the FCA welcome GDF’s expertise and reliable industry input when addressing digital asset regulatory challenges.

It is now also natural for Solidus to lead GDF’s effort to develop a Digital Asset Market Integrity Code of Conduct. Together with our Co-Chairs Huobi, we are delighted to assemble a diverse group of participants representing crypto exchanges and other financial service providers, transparency promoting organizations, data providers, infrastructure providers, legal and compliance professionals. (The working group will convene for the first time this Thursday at 8am EST / 1pm GMT / 8pm HKT. There’s still time to join, e-mail hanne@soliduslabs.com).

Now more than ever, this effort is critical for the future of digital assets: Studies are consistently pointing out 70–90% of crypto trading volume is likely tainted by manipulation; Regulators globally are cracking down on malicious behaviors and requiring additional transparency, licensing and customer protection (As just one example, the United States SEC Chairman Jay Clayton said twice in the last 6 months that improved surveillance standards and reduced manipulation are key to allowing the approval of a crypto-ETF); All the while, institutional and mainstream investors are keen for more access to digital asset opportunities but remain on the sidelines due to market integrity concerns. Developing a practical Code of Conduct for Market Integrity has never been more timely, and acute.

SEC Chairman Jay Clayton restated the need for surveillance as another Crypto ETF is postponed

The Market Integrity Code of Conduct will address the following Scope of Work defined by GDF’s Advisory Board:

“Integrity and credibility of crypto markets are currently major hurdles for mainstream and institutional adoption of digital assets, as well as a key concern for regulators.

The goal of GDF’s Market Integrity Working Group will be to devise a set of pragmatic, implementable guidelines that, if adopted by digital asset service providers, will promote a fair, ethical and transparent industry.

Major issues tackled will include ethical trading and reporting practices, standards for monitoring and surveillance to prevent and detect manipulation and fraud, commitment to client privacy and security, attitudes towards regulation and compliance, and responsible conduct in regards to lending, leveraging and making promises to investors.”

Making digital assets safer, more transparent and more credible requires specialized surveillance, monitoring and compliance tools designed uniquely for crypto markets. It also requires specialized rules promoted by the crypto community — the kind of realistic, expertise-driven and self-mandated rules that could demonstrate responsibility and credibility to the public and regulators, and help pave the way for constructive, rather than restrictive, regulation. New rules, new tools — those are the two keys to taking digital assets into the next level, and we at Solidus are proud to play a leading role in developing both.

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