The Global Digital Finance (GDF) industry body is on the wires with a set of important news. The entity has just announced its Founding Members and released industry Code of Conduct to drive sustainable crypto assets innovation.
The GDF was founded by global leaders in the crypto assets sector Circle, Coinbase, ConsenSys, DLA Piper, Diginex, Hogan Lovells and R3. The not-for-profit initiative is based in London, New York, and Hong Kong.
The founding members are supporting GDF’s initiatives to develop a unified global strategy for the sector. The industry body plans to grow a community membership of firms who wish to adhere to its Code of Conduct.
Our Europe/USA mini summit this afternoon focused on ascribing to the GDF code and an update on the registration and membership model, targeted for Jan ‘19. Get involved! https://t.co/YF7IzEbQhz pic.twitter.com/WBUfE1Dwjf
— Global Digital Finance (@GlobalDigitalFi) October 29, 2018
Crypto Code of Conduct
The GDF announced the release of its crypto industry Code of Conduct (the GDF Code) and a Taxonomy for Cryptographic Assets. The move follows up on the approval of the documents at several global mini-summits held in Asia, Europe, and the USA.
The Code was completed after a 60-day open public consultation which closed on the 31st of August 2018. Over 200 companies and 100 individuals from the global crypto asset community submitted feedback.
The Code represents a set of standards which are to be adhered to by companies which are committed to working together with customers, markets and regulators for the establishment of ethical and professional standards.
The document is touching upon relationships with clients, money handling, risk management, and market practice.
"Building public trust is essential to Circle and to democratizing finance using crypto assets and Blockchain technology," said Jeremy Allaire, CEO of Circle.
The Code is currently consisting of three parts: Overarching Principles, Principles for Token Sales and Principles for Token Platforms. A consultation period for Principles for Funds and Principles for Rating Websites is still open until the 31st of January.
Founding Members Ensure Trust
The companies which have become the founding members of the GDF are well committed to establishing professional standards. The document has been developed in outreach with global regulators, standard-setting bodies and non-governmental organizations.
“Customers want to know the firms they are doing business with are ethical and not breaking (international) laws,” says Simon Taylor, GDF Co-Founder, “this extends from Cryptocurrencies like bitcoin, wallet providers and exchanges, to firms offering investment products in tokens, securities, and funds.”
Regulators worldwide have gone through a tumultuous period caused by the peculiarities of crypto assets. The areas of payment tokens (cryptocurrencies) and their volatility and Initial Coin Offerings (ICOs) have proven to be the most challenging.
“Individuals need to be able to distinguish crypto businesses that are trying to facilitate the safe transfer of digital assets, with a compliance-first approach, from those that may be pushing the boundaries of what may be considered legal in other areas”, says Zeeshan Feroz, UK CEO of Coinbase.
In the views of the founding members the companies which commit to adherence to the crypto Code of Conduct, show their customers that their safety and security are paramount.
Taxation and Regulations
Both the taxonomy and the Code of Conduct documents have been developed within existing legal and regulatory structures. The commitment of the industry to the code can make the difference between legitimate crypto companies and a dishonest approach towards customers.
“It has been incredibly positive to see the industry come together with regulators and policymakers to achieve something significant in a relatively short space of time”, says John Salmon, Partner & Global Lead of Blockchain Practice, Hogan Lovells.
The Co-Founder of R3, Todd McDonald says that the Code is of vital importance to firms wishing to demonstrate to regulators they are adopting professional practices. He also highlights that questionable practices by some in the industry participants should not hinder the access to crypto assets offered in a transparent and responsible manner.
“Regulators have been hugely supportive of the development of GDF and the Code,” says Jeff Bandman, GDF Co-Founder and the former LabCFTC innovation head, “digital assets are global and no one jurisdiction has authority over the entire sector. The Code provides industry adopters a supranational toolbox to demonstrate to global regulators that they are good citizens.”
Companies will be able to register with GDF to attest to their organization’s adoption of the Code from Q1 2019. The registration scheme is currently in development, led by DLA Piper and in consultation with global industry firms.
Self-Regulation Key to Crypto Markets Sustainability
Just like the Global Code of Conduct for the foreign exchange market, the crypto Code of Conduct can play an important role in the future development of the industry. The creation of a global industry-led self-regulatory body ensures that digital assets can work seamlessly across borders.
In contrast to the foreign exchange market, where participants have been pressured by their counterparts to adopt the code, the crypto code of conduct adoption hinges on industry leaders adopting the message.
“Considering the cross-border nature of crypto assets, establishing a global standard of conduct for the crypto asset industry to commit to is a proactive way for member participants to demonstrate accountability and protection for investors,” says Martin Bartlam, International Group Head of Finance and Global FinTech Co-chair at DLA Piper.
The Chief Compliance Officer, Diginex, Malcolm Wright, concluded: “We believe collaboration between leading market participants will be key to shaping the future regulatory environment for the digital asset industry and are committed to working closely with GDF to ensure the success of future workstreams.”
Our readers who are keen to find out more should visit the blockchain-focused sessions at the Finance Magnates London Summit on the 14th of November.
Speakers include Teana Baker-Taylor who is a member of the Advisory Council of Global Digital Finance, Simon Taylor who is a Co-Founder and member of the GDF Advisory Council and Co-Founder of 11:FS, a challenger consultancy, and Claire Wells - Legal & Business Affairs Director at Circle.
