To that end the Crypto Market Integrity Coalition (CMIC) has released its industry standard for market making. Sounds promising, right? 11 A positive move towards a cleaner crypto ecosystem? Before we pop the cork on that celebratory champagne, let’s press for hard accountability. Is this really a serious and real effort at reform? Or is it simply a cute political trick to make the inevitable and much-needed government regulation that will surely follow more palatable.
Who Watches The Watchmen Exactly?
The CMIC boasts 51 member firms, a veritable who's who of the crypto world: Coinbase, Circle, Gemini, Robinhood… the list goes on. These are the companies that would be best positioned to profit from a deregulatory approach. Can we in good faith continue to think that they should be neutral third-party referees of market fairness? It’s akin to asking wolves to engineer a new security door for the hen house.
Think about it. We witnessed the consequences of this kind of “self-regulation” in the run-up to the 2008 financial crisis. How did that work out for everyone? Remember the ratings agencies? These individuals were richly compensated to determine the risk of exotic financial instruments. Only when the whole edifice fell apart did they issue their highly complimentary reports. Conflicts of interest, anyone?
Italics are necessary in this case, since conflict of interest is the key term here.
Don't get me wrong, innovation is crucial. History teaches us a harsh lesson: unchecked innovation, especially in finance, leads to disaster. We should look to the future and gain inspiration and insight from the past, not reproduce its greatest injustices.
Loopholes Big Enough To Drive A Truck Through?
The CMIC standard addresses creating transparency, managing conflicts of interest, and data ownership and handling. Sounds good on paper. Where's the beef? What are the consequences for non-compliance? Who's auditing these firms? What transparency measures have been instituted, and what specific mechanisms are in place to avoid allowing malicious actors to exploit loopholes?
I would bet one whole Bitcoin — and of course that would be a small Bitcoin!—that these standards are riddled with murkiness. Those who want to game the system will absolutely find ways to exploit them. It’s like one of those corporate social responsibility reports that are 90% gloss and 10% actual substance. Greenwashing companies that are still poisoning the environment and abusing workers.
We need specifics. We need teeth. We need independent oversight. Without those, this “standard” is nothing but window dressing.
The timing of this initiative is… interesting. Regulators across the globe are belatedly beginning to turn their enforcement eyes toward the crypto marketplace. In fact, because of this, the CMIC’s standard seems more like a smokescreen than a real pledge to integrity—a preemptive strike, maybe. A way to say, "See? We're cleaning up our act! No need for heavy-handed government intervention."
| Feature | CMIC Standard (Alleged) | Independent Regulation (Needed) |
|---|---|---|
| Enforcement | Self-policing | External audits, legal penalties |
| Accountability | Limited transparency | Full public disclosure |
| Conflict of Interest | Inherent | Independent oversight board |
Averting Regulation Or True Reform?
It's a classic move. Industries under heightened public scrutiny frequently parade self-regulation out as a panacea to deflect demands for tougher regulation. But history is replete with instances of self-regulation not working to protect consumers or prevent unscrupulous behavior.
Look at the pharmaceutical industry. They’re highly self-regulated—they’ve got their own codes of conduct, their own ethical guidelines. Yet, they continue to aggressively market addictive painkillers, price gouge life-saving medications, and lobby against regulations that would protect patients.
Still, the crypto market is the Wild West. Fraud, manipulation, and outright theft are rampant. While the CMIC’s effort is to be applauded, it’s a step – a baby step at best. We need to hold these companies accountable. We need to demand transparency. We have to admit that self-regulation goes just short of what’s needed.
To be clear, we’re not suggesting you take this standard at face value as the solution. Instead, demand greater transparency and accountability. Ask the tough questions. And remember: if something sounds too good to be true, it probably is. Let’s not allow this Trojan Horse into the gates of our digital city.
Don't blindly accept this standard as a solution. Instead, demand greater transparency and accountability. Ask the tough questions. And remember: if something sounds too good to be true, it probably is. Let's not let this Trojan Horse into our digital city.
