Various cryptocurrency trading firms have recently met to discuss ways to prevent the rising number of hacks and scams plaguing the crypto industry, and proposed the creation of a blacklist that could keep bad actors at bay.
According to Bloomberg, firms like Ripple, market maker Cumberland, and Michael Novogratz’ Galaxy Digital Holdings, as well as more than 30 other firms, met at a round-table event in Chicago to discuss possibilities.
During the event, the creation of a list of entities involved, directly or indirectly, in illicit activities was considered, as well as giving companies with a good reputation some form of accreditation.
Other options considered included standards to verify the identities of customers, and sharing information on those who default on derivatives trades. The event, organized by Crypto OTC Roundtable Asia (CORA) didn’t see the firms reach a final decision. CORA is set to meet again in the near future.
Darius Sit, a Singapore-based managing partner at crypto trading firm QCP Capital who helped organize the meeting, stated:
A community-wide effort to improve compliance standards would prevent liabilities that might stem from trading with bad actors or dealers that trade with bad actors.
He added that a self-governance initiative such as this one is “something that regulators are keen to see.” Yoshi Nakamura, a senior member of Galaxy Digital’s trading team, noted that the willingness of the firms to work together “bodes well for the future.”
Notably on the same day the meeting occurred, leading cryptocurrency exchange Binance revealed it suffered a major security breach, that saw hackers take over 7,070 BTC (worth over $40 million) from its hot wallet.
Earlier this year, research from US-based data security firm CipherTrace revealed that in the first quarter of this year $1.2 billion worth of cryptocurrency were lost to theft and fraud. The figure, which already included Bitfinex’s missing $850 million, is nearly equivalent to 71% of last year’s total $1.7 billion loss.