Digital asset industry group forms to promote market confidence

A group of cryptocurrency exchanges and other market participants launched an organization Monday that they hope will boost investor confidence in digital assets.

The Crypto Market Integrity Coalition issued a pledge signed by its 17 members to combat fraud and manipulation and ensure fair digital markets.

“We agree that, regardless of regulatory requirements, market activity should be reviewed and monitored on a reasonable ongoing basis for purposes of detecting and eliminating market manipulation and unfair market abuses,” the pledge states. “Clear instances of fraud and manipulation are illegal, and we will commit to preventing these activities to the best of our ability.”

As crypto trading as skyrocketed in popularity, the Securities and Exchange Commission has raised concerns about investor protection. SEC Chairman Gary Gensler has referred to the crypto market as the Wild West.

The new organization “is literally a coalition of willing to counter the narrative that digital asset markets are the Wild West,” said Kathy Kraninger, vice president of regulatory affairs for Solidus Labs, a founding member of the group. “It’s about doing the right thing for your customers and your users even when there is regulatory uncertainty.”

The group doesn’t oppose regulation but does want to help shape it.

“We are committed to market integrity,” Kraninger said. “We want to see a safe and sensibly regulated crypto ecosystem.”

The coalition isn't a trade association and won't lobby as a membership group. But its individual members could be part of efforts to educate lawmakers and regulators about the crypto markets, Kraninger said.

As demand for cryptocurrencies has risen, financial advisers are getting more inquiries from their customers and clients. The members of the coalition hope to stand out as crypto market participants that can be trusted.

“We’re helping set a line in this marketplace so that brokers and asset managers can understand how the market operates,” said Kraninger, whose firm works with brokers and exchanges to implement crypto compliance and risk management programs. “We’re trying to set off a part of the ecosystem that is more amenable to regulation.”

The coalition will “encourage more firms to take the pledge and demonstrate commitment to market integrity,” the group said in a statement. It also plans to offer training programs, share best practices, develop standards and work together on market surveillance.

“We do want this to be a platform for sharing, awareness and education,” Kraninger said.