Virtual Currency Firms to Establish Industry Group, Best Practices (Aug. 5, 2013)
Aug. 5, 2013
On the heels of Thailand’s central bank banning the use of Bitcoin, virtual currency companies, including virtual currency exchanges, have spelled out plans to establish a self-regulating industry group called the Digital Asset Transfer Authority. “Our companies are pioneering new services with potential to reduce the friction and cost of payments substantially and make low cost payment services available to hundreds of millions of individuals and businesses around the world. To reach this potential, to inspire confidence in the services we offer, and to ensure fair and responsible treatment of consumers and merchants, we believe our industry must evolve in compliance with law and regulation,” the group said in a statement.
Last week, 17 executives from companies, including BitInstant, BitPay, CoinX and more, said they have established a committee that will: 1. Develop best practice anti-money laundering and sanctions compliance standards for emerging payments and virtual currency firms; 2. Build public and regulatory confidence by serving as a source of business and technical standards for the prudent and responsible conduct of payment transactions; 3. Engage with member firms, merchants and customers, regulators, law enforcement and legislators to identify and address emergent public policy concerns and risks; and 4. Work to establish the Digital Asset Transfer Authority (DATA), ideally as a formal self-regulatory organization, to develop, publish and ensure member compliance with standards.
The committee, which is seeking more participants, also noted that DATA likely will require its members to obtain all required licenses and registrations, and that its oversight will supplement, not replace, the oversight of statutory regulators.
As previously reported in Pay News, virtual currencies have come under increased regulatory scrutiny in many countries. For example, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) in March issued guidance on virtual currency, categorizing administrators and exchangers of virtual currencies as money services businesses and thus subject to certain registration, reporting and recordkeeping regulations.