Due to uncertainty on the part of the US Securities and Exchange Commission and several government licensing requirements, the development of cryptocurrency trading in the United States remains discontinued by trade reserved for OTC billboard issues.
To ensure the continued and healthy growth of the digital asset markets, it is important to increase the market share of institutional cryptocurrency trading. This is the best business model for digital asset markets and will get the US government to move faster. Digital real estate markets that incorporate this will realize that better controls will attract more institutional liquidity, and where to start is an organization that rests on a guiding set of control principles.
Fortunately, the Digital Asset Markets Association, or ADAM – a consortium of digital stock market participants founded in 2018 – took the lead in November 2019 by publishing its Code of Conduct. (The Asian Securities and Financial Markets Association Best Practices in Digital Asset Exchanging, published in 2018, can also be a good guide.) The required symbol for digital real estate markets includes eight basic principles: compliance and risk, governance, market ethics, conflicts of interest. Transparency and fairness, market integrity, preservation, information security and business continuity, combating money laundering and terrorist financing.
With this foundation laid, you can proceed to the next implementation. Once again, there is no need to reinvent the wheel – current standards and regulations provide guidelines that can be adapted to any digital asset market. First, he headed to Bermuda to find a regulator that embraces digital assets and is committed to removing regulatory uncertainty. Even Wyoming, which boasts the most advanced digital asset structure in the United States, has designed the digital asset site in Bermuda.
Malta also has helpful regulations (just watch the effect of public effort), followed by New York. I want to go further and give you links to the best jobs for the most relevant resources.
The Bermuda Code of Practice provides simple controls for the governance, compliance and risk management common to digital asset markets. Mature organizations looking for more complete guidance will familiarize themselves with the Virtual Financial Asset Rules in Malta, Chapter 3, Section 3, which can also be helpful in conflicts of interest related to operational independence, incentives, and personal trading. Nevertheless, the FDA’s Conflicts of Interest Report issued in October 2013 remains the best and most comprehensive regulatory guidance on conflicts in financial institutions.
Adequate information is required from clients to exercise credible control over transparency and fairness. The Bermuda Rules for Customer Information and the New York Rules for Virtual Currency provide the clearest information. Most useful guide.
To ensure market integrity, especially for the US digital asset markets that are subject to CFTC rules, the Cboe Futures Exchange Rulebook provides a well-regulated resource.
The Bermuda Digital Asset Preservation Code sets standards for digital asset recipients for storing secure keys, managing and operating transactions. However, as noted by FINRA and SEC, the SEC’s customer protection rule and CFTC’s client money splitting rules are not well adapted to the digital asset markets.
The cybersecurity requirements of the New York State Department of Financial Services’s financial services companies offer a round-table cybersecurity checklist, but the Bermuda Code of Conduct is the best resource for keeping safe storage. New York City’s virtual currency rules provide a useful business continuity checklist. A ‘must have’ guidance for cybersecurity leaders in the digital asset markets includes security and privacy control, key management, cryptographic key generation, and cybersecurity event recovery by the National Institute of Standards and Technology.
Prudential standards and industry guidelines in Bermuda provide digital asset companies detailed guidance and even templates for combating money laundering, but the Financial Crime Network – and especially its guide on convertible virtual currencies – remains the main source (of course).