Self-Regulating Bitcoin Exchanges: Will It Work?
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What is the main topic discussed in this episode?
With your Money Briefing, I'm Charlie Turner at The Wall Street Journal in New York. In a moment, we'll talk about an effort to self-regulate exchanges that trade Bitcoin and other digital currencies.
What they're trying to form is a body that would basically institute a series of best practices, self-imposed rules and regulations for this industry.
The Wall Street Journal's Paul Vigna will join us. First, here are some money and market stories you need to know. Wall Street Journal heard on the streets Charlie Grant says that all the clever wording in the world by corporate executives can't hide really bad news from investors. Generic drug company Lanet said its contract to distribute drugs made by Jerome Stevens would expire next March. Lanet listed several drugs and CEO Tim Cruz said that they would still significantly contribute to the company's financial performance in the coming months. But one of the drugs is the thyroid medication levothyroxine, which is among the most prescribed medicines in the U.S. The thyroid category accounted for about 40% of Lanet's revenue.
Investors noticed Lanet shares were down 60%. Check out Jason Zweig's Intelligent Investor column in the journal.
What is the Virtual Commodity Association and who founded it?
Amid the march to the longest market bull run in history, stocks definitely aren't cheap. You may be one of a number of investors who believe stocks have nowhere to go but down, way down. There are concerns about rising interest rates, trade battles, emerging market turmoil, and trouble surrounding some big high-tech names. Jason says investors who fear the worst must, above all, not act rashly. It is, however, probably a good time for these people to reevaluate their investing plans and take some incremental steps to prepare for hazards that might make the market crash. Find out what those steps are in the Intelligent Investor at WSJ.com.
Bitcoin, Ethereum, Monero, Ripple. The viral growth of these cryptocurrencies has fueled a $200 billion industry, now with more than 1,000 digital currencies, but no real regulation to speak of. The Wall Street Journal says several cryptocurrency exchanges have signed on to what appears to be the industry's first online.
Which exchanges initially joined the VCA and why does membership matter?
self-regulatory organization, the Virtual Commodity Association. The VCA was founded by Cameron and Tyler Winklevoss, the co-founders of Gemini Trust. Let's find out more about this organization and its goals from The Wall Street Journal's Paul Vigna, who joins us in our studio. Paul, the VCA announced its first member exchanges this week. They include Bittrex, BitFlyer, Gemini. What do the members want the Virtual Commodity Association to accomplish?
Well, this is part of an effort that you've seen this among certain exchanges. And to be clear, what you have now in the cryptocurrency market is a very broad global market, a lot of exchanges, a lot of people interested, but you don't have any kind of real oversight. The things that exist in traditional markets do not exist at all. So you have a lot of exchanges that allow people to trade, but their reliability is wildly divergent. Some are already regulated. We should point out, it's interesting, Gemini Trust, the Winklevoss' exchange and their company, operates under a charter, a trust charter from the state of New York, just like any other chartered trust bank in the state. A couple of other exchanges are regulated.
What transparency and oversight problems plague cryptocurrency exchanges today?
They've given in to this idea that In order to attract institutional money, in order to attract the mainstream, in order to be a reliable business, we are going to have to submit to some level of oversight.
Now, are you saying that these particular exchanges, the ones that you've mentioned, regulate themselves? What regulation, what specific regulation are they subject to?
They're subject to, like in the case of Gemini, they are subject to all the laws that any trust bank in New York State is subject to. BitFlyer is one of the companies that received what's called the BitLicense, which was put out by New York State Department of Financial Services, which is another set of regulations that they adhere to.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:05–1:18
2
What is the Virtual Commodity Association and who founded it?
1:18–2:23
3
Which exchanges initially joined the VCA and why does membership matter?
2:23–3:38
4
What transparency and oversight problems plague cryptocurrency exchanges today?
3:38–5:12
5
How would the VCA create standards and share best practices among members?
5:12–7:35
6
How could the VCA enforce rules and what penalties might exist for violations?
7:35–8:21
7
Will bad actors simply stay outside self-regulation and undermine the VCA?
8:21–8:58
8
What is the likely future balance between self-regulation, government oversight, and the black market?
8:58–9:13
Speakers
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