The CCC is just one example of a collaborative association working to define cryptocurrency sector standards for regulators to adopt. Hailey Lennon, partner at law firm Anderson Kill, told Cointelegraph that various trade associations have developed over the last few years. She mentioned that some of these include the Blockchain Association, Virtual Commodity Association and Crypto Council for Innovation.
According to Lennon, it’s logical for crypto and blockchain companies to want to be a part of working groups and trade associations to help educate regulators, especially with all the different state and federal regulations floating around the space: “Regulation stifles innovation; carefully crafted regulation does less harm.”
Will working groups make an impact?
Lennon pointed out that many of the cryptocurrency working groups and collaborative associations mentioned are not currently recognized as official self-regulatory organizations, or SROs. In turn, Lennon explained that it may be challenging for regulators to work with these groups:
“An SRO is typically given legislative authority from a regulatory agency that allows it to create policies and enforce them in a specific industry. For example, FINRA is an SRO for the U.S. Securities and Exchange Commission. Currently, none of the organizations mentioned here have the legislative authority to function as an SRO and, therefore, they are more trade associations or working groups who provide suggestions for how regulations impact the space.”
Lennon explained that these groups are indeed helpful but don’t hold the same authority as SROs. Echoing this sentiment, Zachary Kelman, managing partner of Kelman PLLC and general counsel of Cointelegraph, believes that it helps to have an organizational body put out standards, but that the federal government generally looks at traditional industry standards: “The federal government has an agenda. They manage money service businesses and want them to comply with certain laws.”
While this makes sense, Lennon remarked that another challenge is the growing number of working groups within the crypto space. In particular, Lennon is concerned that with so many working groups, there are overlapping goals and potentially conflicting messages: “In a perfect world, there would be collaboration between, or merging of, many of these groups to bring more cohesion to the industry.”
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