The First of Its Kind Dispute Resolution Mechanism for Crypto Traders and Digital Asset Investors

/The First of Its Kind Dispute Resolution Mechanism for Crypto Traders and Digital Asset Investors

 

There has been much talk in the Blockchain and digital asset industry about regulations and investor protections over the last few years. On the one hand, individual governments are taking steps to educate investors on risks of token offerings and investments into Blockchain projects, while on the other hand developing some elements of regulation by either accepting or restricting the use of digital currencies for trading or purchasing products or services.

This is partly because existing laws do not recognize digital assets yet or regulations have not yet been created in many parts of the world.  Even in places where guidelines and guidance exist from regulators, consumer protection mechanisms are still evolving. Comparably, today’s equity and forex investors have such means by way of regulations and governing bodies for retail brokerages in the US, UK, Japan, Australia, and other major and emerging jurisdictions. As more and more industry associations and think-tanks emerge for digital assets, we expect to have a more clear definition of token classification and legal distinctions across jurisdictions and expect to contribute towards those efforts either directly or through consumer education.

Dispute Resolution Service

Beyond complying with existing laws and rules such as AML & KYC-related, little has come in the way of developing a process by which digital asset traders and investors can file complaints with a 3rd party, such as a governmental regulator or non-governmental independent arbitrator to resolve issues or disputes that arise with their digital asset exchange or e-wallet provider.

The Financial Commission is an independent Self-Regulatory Organization (SRO) and External Dispute Resolution (EDR) provider for the online Forex, CFD and crypto trading indusзtry that has developed effective solutions for digital asset traders and investors to increase self-regulatory efforts in the absence of government-sponsored mechanisms.

As part of the launch of Financial Commissions’ dispute resolution service for Blockchain Association members, a digital currency trader on an exchange or an investor holding digital assets in an e-wallet can submit their disputes as formal complaints and receive an unbiased, transparent and neutral resolution to their issue, in the event it could not be resolved first with their digital currency service provider. The Blockchain Association relies on the Blockchain Expert Committee (BEC) which is comprised of Blockchain industry experts, including those that have participated in independent 3rd party dispute resolutions in the past, and have studied the facts of each dispute and the processes in place to reach an official resolution.

By submitting a complaint to the Financial Commission’s Blockchain Association, the digital currency trader or investor may receive a thorough and complete resolution from the team of experts, helping to provide users with educational information and guidance on what options are available to them as a next step. Because the dispute resolution process is not currently based on established market regulations, the resolutions provided are non-binding on the customer and their service provider yet provide significant value in the form of recommendations for both parties.

Member Rules and Compliance

Comparable to the dispute resolution services that Financial Commission offers in other asset classes, such as Forex and CFD markets, the Blockchain Association members will need to maintain compliance with member rules, and we expect to establish such standards to help ensure compliance.

Complaints that are filed with Financial Commission’s Blockchain Association dispute resolution service will fall into one or more categories as follows:

Transactional: issues with the speed or actual processing of a blockchain transaction involving digital assets. On an exchange, inside an e-wallet or via a broker.

Security:  issues arising from theft due to personal information or ledger entry being compromised. This could be due to the service provider being compromised or the customer’s own Blockchain record being hacked.

Investment: cases where customer funds are transferred to 3rd party for investment purposes: whether to convert fiat funds into digital assets and speculate on prices or to trade digital assets purchased using customer funds.

If you’ve experienced issues while trading or investing in digital currencies on an exchange or e-wallet and have not been able to resolve it with your service provider, go ahead and visit the Financial Commission’s Blockchain Association website page to find out how to file your dispute and get independent and professional feedback on your case.

For more information on the Financial Commission and its services for traders, investors and brokerages alike, please contact us at info@financialcommission.org.

2018-12-17T16:05:47+00:00December 17th, 2018|