Ten crypto-focused financial services companies have formed the Association for Digital Asset Markets (ADAM) to develop a standard code of conduct for companies dealing with digital assets. The announcement was made via Medium post – ADAM's first – on November 27.
The cryptosphere has something of a reputation for attracting malicious actors. Those wishing to invest their hard-earned money in digital assets need a way to make sure the company they are dealing with will treat them fairly and with the customer's best interest at heart.
To this end, ADAM consortium members are looking to develop a code of conduct, which will not be an alternative to official regulations, but will instead complement existing laws and regulations. Additionally, ADAM aims to inform regulators and lawmakers of regulations that need to be instituted and of those that hinder progress.
ADAM spokesperson Seth London told ETHNews of the importance of gaining regulator trust:
"Market participants have a responsibility to promote best practices worthy of regulators' trust. That is what ADAM seeks to do. Through its Code of Conduct, ADAM intends to develop a rules-based infrastructure that serves the needs of those in the market and those seeking to become involved in the markets for digital assets."
Among other things, the ADAM code of conduct will standardize rules and ethics in the areas of market integrity, KYC/AML, and price manipulation.
According to the Medium post, ADAM will register as a private 501(c)6 not-for-profit organization and will elect a board of directors, who will be responsible for appointing member firms and independent advisors to draft the code. The group says the advisory board will consist of scholars, legal experts, technologists, and former regulators.
Companies wishing to participate in ADAM must be involved in the trading of digital assets and must adhere to ADAM's principles and bylaws. The founding members of ADAM are BitOoda, BTIG, Cumberland, Galaxy Digital, Genesis Global Trading, GSR, Hudson River Trading, Paxos, Symbiont, and XBTO.
Although across-the-board ethical standards have yet to be established in the cryptoshere, the establishment of the consortium follows the formation of the Winklevoss-proposed Virtual Commodity Association (VCA). Similar to ADAM, the VCA is intended to ensure virtual commodity markets remain above board. However, unlike ADAM, its aim is to be a self-regulatory organization (SRO) for the industry. Its working group consists of four exchanges and trading platforms: Gemini, bitFlyer, Bitstamp, and Bittrex.
In an email to ETHNews, London explained how ADAM differs:
"Other groups are doing great work and ADAM will seek to partner with those actively working to advance the goal of fair and orderly digital asset markets. We are an industry group. Our members have a vested interest in the long-term health of these markets. We're not an SRO. ADAM must earn the trust of regulators before seeking that status. We hope to do that by working with those firms who share our commitment to safe, strong and efficient digital asset markets."