Over 30 Major Digital Asset Firms Meet to create a Crypto Industry Blacklist: Bloomberg Reports


A group of traders from nearly three dozen major crypto firms has reportedly mooted the idea of establishing an industry blacklist containing counterparties that engage in or enable nefarious activities within the digital asset space.

According to a Bloomberg report published on May 8, the proposal to have such a blacklist arose when traders from about 35 firms within the crypto space met in Chicago this Tuesday.

The meeting brought together major players in the cryptocurrency sector, including Cumberland, a crypto trading unit of major trading platform DRW Holdings Inc.

Others to participate included Galaxy Digital Holdings of crypto billionaire investor Mike Novogratz, QCP Capital, and San Francisco-based blockchain tech startup Ripple.

Together, the firms proposed that a blacklist be created to highlight bad actors or entities that reneged on trades or whose activities sabotaged the industry.

A part of the group is reported to have been in favor of establishing a sort of accreditation mechanism for industry-related companies, with approval coming from CORA. This is an association of businesses within the crypto space under an umbrella body called Crypto OTC Roundtable Asia (CORA).

Bloomberg quotes the managing partner at QCP Capital Darius Sit as saying that having “a community-wide effort” that target enhancing compliance standards is essential.

According to Sit, such a move will likely prevent parties from incurring potential liabilities likely as a result of trading with malicious entities or “dealers that trade with bad actors.”

He added that:

“A self-governance initiative like this is also something that regulators are keen to see.”

The meeting in Chicago happened the very day major crypto exchange Binance suffered a massive security breach that allowed hackers to steal 7,000 bitcoins (BTC). The value of the stolen bitcoins was estimated to be about $40,705,000.

Binance CEO Changpeng Zhao noted in a letter posted on the exchange’s website that the hackers withdrew the bitcoins from the exchange’s hot wallets. According to the CEO, the wallets only held 2% of Binance’s total BTC holdings.

The loss of the $40 million worth of bitcoins comes barely weeks after the founder of blockchain analytics firm Chainalysis alleged that most cryptocurrency crimes involved bitcoin.

According to Jonathan Levin, also the firm’s COO, almost 95% of crypto-related crimes that law enforcement agencies investigated were linked to bitcoin.

He, however, explained that the aspect of transparency in crypto transactions allowed law enforcers to build cases much faster compared to traditional finance. Particularly pointed out was the fact that investigators do not rely on foreign banks for records when building cases against suspects.

The Chicago meeting also comes after about two dozen individuals, all big-time crypto traders and investors, reportedly met in Singapore earlier this year, with their main goal being to strategize on how to take crypto adoption to the mainstream.

Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.

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