Compliance issues have affected the mass adoption of crypto assets as several regulators across the world find that these digital assets violate their financial regulatory frameworks.
Several companies have struggled with bringing their products into compliance with regulatory requirements, and this has affected their business.
OKEx works on a platform to bring crypto exchanges into compliance
One of the leading exchanges, OKEx, has announced that it will be launching a platform that will help cryptocurrency exchanges to become compliant with global standards.
The exchange said that it is in talks with other exchanges and stakeholders to work on a Global Self-Regulated Organization (SRO) for the benefit of the industry as a whole.
The SRO’s role would be to standardize the policies and practices that are used by cryptocurrency exchanges, and this would make it easier for the firms to achieve compliance in the different jurisdictions they operate in.
This body would work similarly to traditional financial institutions such as the World Economic Forum and the World Federation of Stock Exchanges.
The announcement about the SRO was made by Enzo Villani, the head of OKEx’s International Strategy and Innovation, at the DELTA Summit, which took place in Malta.
Villani said that other organizations have developed platforms to bring the standard of cryptocurrency exchanges up, but most of these initiatives are focused on single jurisdictions.
He said that the efforts of these organizations are commendable, but OKEx is making moves to create a global platform that will lead to the development of international standards.
The DELTA Summit heard that they can do things that traditional exchanges cannot, but to succeed, they need to achieve the mainstream adoption of crypto assets.
There is a need for advancements because the current methods will not work for a pension fund, concluded Villani.
Exchanges to obtain membership into SRO
The SRO will seek to bring together cryptocurrency exchanges from different parts of the world, regardless of these exchanges’ size and where they operate.
It will serve as an independent body that is membership-based, and its standards will be adopted by all the firms that will be a part of it.
All the member exchanges will be involved in the development of policies and standards to which SRO affiliated exchanges will adhere.
Standardized practices and policies will help to push the mass adoption of the asset class.
For many people, there is a lack of clarity surrounding crypto trading, and standardized methods of business would change that.
The SRO will also be used as a platform that brings education about cryptocurrency to regulators and concerned government agencies. The education will involve the gathering of critical metrics that are important in crypto trading.
OKEx emphasizes that it is essential for cryptocurrency exchanges to come together and set standards that will bring in the new wave of financial practice.
Andy Cheung, Head of Operation at OKEx, said that the only way that exchanges can achieve the maximum impact is by coming together and working on a set of global standards that would work as a regulatory framework across the world.