Crypto Companies Need Rules, Winklevoss Says

C. Winklevoss clarified a bit recent "Crypto Need Rules" promo, saying crypto companies need it, but not crypto itself, in light of the QuadrigaCX situation
18 March 2019   431

Co-founder and president of the Bitcoin exchange Gemini Cameron Winklevoss commented on the recent advertising campaign of the platform, held under the slogan "Crypto needs rules." In particular, he explained that the rules are needed not for the cryptocurrency itself, but for companies that participate in this industry, especially in the light of recent events around the QuadrigaCX exchange. This is reported by Bitcoinist.

It is no secret that the Winklevoss brothers have long been claiming the need to “reorganize” the cryptocurrency industry, which has been hacked throughout history and been thru a lot of fraudulent schemes. Brothers with the help of Gemini want to help it get rid of comparisons with the “Wild West”.

At the same time, the Gemini advertising campaign launched in January was heavily criticized by the Bitcoin community, convinced that the only possible rules are the rules of the protocol itself, the execution of which is guaranteed by its own full nodes.

Conviction that the activities of cryptocurrency companies should be regulated by the state and that investors cannot get enough protection in the unregulated market, was expressed by brothers shortly after the start of the January campaign.

Now Cameron Winklevoss continued this topic, explaining that the cryptocurrency itself does not need rules, however companies need these rules. As an argument, he attached an excerpt from the third report to his tweet, which was presented to QuadrigaCX auditor Ernst & Young by the Supreme Court of Nova Scotia. It, in particular, deals with 14 identified accounts that were created inside the exchange outside the normal process and to which artificial deposits were received, from which funds were then used for trading.

There are a lot of carcasses on the road of crypto that we’ve seen and learned from. At the end of the day it’s really a trust problem. You need some kind of regulation to promote positive outcomes.
 

Cameron Winklevoss

Сo-founder, Gemini

In addition, the head of Gemini outlined his thoughts on this issue in a recent blog post, stating that the QuadrigaCX story caused the Bitcoin industry a significant reputational damage.

He did not bypass the "rules of the protocols", which, as is often said, already have enough rules.

Some argue that the protocols themselves have enough “rules.” We agree, but protocols only govern the movement of funds inside systems; they don’t provide controls or oversight for the entrepreneurs and companies that build on top of them. Every crypto incident to date has been a company (or human) problem, not a crypto problem.
 

Cameron Winklevoss

Сo-founder, Gemini

For this reason, he concluded, Gemini will continue to do everything possible to work within a regulated field, offering maximum protection to investors, and will continue to play an important role in the efforts made by the Virtual Commodity Association (VCA).

Fake Trading Share to Reach 68%, - FTX Global

This figure, however, is significantly lower than what Bitwise's report and the discrepancy is explained by the difference in methodology
04 July 2019   1187

The exchange of derivatives FTX Global and Alameda Research conducted a study that estimated the volumes of fictitious transactions (wash trades), presumably prevailing in many cryptocurrency exchanges.

The report says that 68.6% of trading volumes displayed by CoinMarketCap are fake. This figure, however, is significantly lower than what Bitwise Asset Management announced in March.

The discrepancy between the results in almost 30% of the authors of the new study is explained by the difference in methodology. So, FTX Global is sure that Bitwise used an too strict approach to data analysis, which is why a significant proportion of real trading volumes fell into the category of fake ones.

While our methods are not foolproof, we believe they paint the most accurate picture of the true nature of cryptocurrency trading volume that anyone has made publicly available as of yet.
 

FTX Global Team

The Alameda methodology involves verifying the authenticity of data on trading volumes on various exchanges based on six different parameters, including manual verification of information and comparison of order books.

FTX Global Website
FTX Global Website

In particular, the experts found out that some sites provided data on the volumes of foreign exchanges for their own, with a slight delay in time. Other platforms used more advanced techniques - for example, they introduced large fake volumes only against the background of many smaller orders, thus trying to hide the true state of affairs.

The main purpose of these tactics is to raise the platform higher in the CoinMarketCap rating, creating a false impression of its liquidity. It also sometimes allows for the ability to charge a higher listing fee.