go mainstream while market manipulation is rampant
Cryptocurrency can't go mainstream while market manipulation is rampant. (Photo: iStock)
Bitcoin,  Cryptocurrencies,  Ripple

Coinbase, Ripple executives fight market manipulation to woo general public

The Blockchain Association says strong, fair federal regulation is needed to attract mainstream investors to cryptocurrency and support innovation

By  / January 28, 2020 /

Coinbase and Ripple executives are leading an effort to fight the market manipulation and fraud that’s chasing off cryptocurrency investors and the uncertainty strangling innovation.

To do this, the Blockchain Association has formed a Market Integrity Working Group with the goal of pushing for clear, fair, and transparent federal regulation of the cryptocurrency trading markets.

Leading the group are Breanne Madigan, head of global institutional markets at Ripple, and Rachel Nelson, senior director of regulations at cryptocurrency trading platform Coinbase.  

“Honored to co-chair a group dedicated to improving the integrity of #crypto markets—and in good company!” Madigan said in a Twitter post.

 

Indeed, building the “integrity of cryptocurrency markets” is at the heart of the new working group, the blockchain and cryptocurrency advocacy group said in a Medium post Tuesday. That integrity is vital to attracting mainstream and institutional investors, it added. 

There oughta be a law

The only way to build that integrity is to “enact comprehensive federal regulations governing cryptocurrencies and other tokens,” the association argued.

New regulations could also level the playing field with the traditional stock exchanges, private trading venues, and broker-dealers that don’t have to contend with a “labyrinthine patchwork of state-by-state regulatory frameworks,” like cryptocurrency exchanges do, said the group. 

The Blockchain Association’s plan calls for giving the more crypto-friendly U.S. Commodity Futures Trading Commission, or CFTC, this regulatory authority, rather than the Securities and Exchange Commission. The SEC has had a more combative relationship with cryptocurrency exchanges and blockchain firms’ initial coin offerings.

Indeed, the SEC has serious concerns about price manipulation in the bitcoin markets. The agency cited price manipulation as its main reason for refusing to approve any Bitcoin ETF proposals—a move reinforced by a 2019 Bitwise report, which concluded that 95% percent of all bitcoin trades were fraudulent. 

“To improve market integrity and provide consumers the confidence they deserve, Congress may need to enact legislation to support the orderly and secure functioning of crypto markets,” the Washington, D.C.-based advocacy group said.

The association suggested expanding the CFTC’s authority to include the regulation and oversight of digital commodity exchange markets as part of this legislation. As a happy byproduct, doing so would also go a long way in supporting the industry’s argument that cryptocurrencies should be considered commodities, not securities.

“Cryptocurrency exchanges deserve a clear regulatory framework, the establishment of which would ultimately enhance market integrity and drive consumer adoption of cryptocurrencies,” the advocacy group said.  

(Editor’s Note: Modern Consensus Founder Ken Kurson sits on the board of Ripple.)





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Leo Jakobson, Modern Consensus editor-in-chief, is a New York-based journalist who has traveled the world writing about incentive travel. He has also covered consumer and employee engagement, small business, the East Coast side of the Internet boom and bust, and New York City crime, nightlife, and politics. Disclosure: Jakobson has put some 401k money into Grayscale Bitcoin Trust.