By Hannah Lang

(Reuters] – Circle, Anchorage Digital, and Huobi Global have formed a new group to combat market manipulation. They are trying to build trust in the burgeoning cryptocurrency asset sector.

The Crypto Market Integrity Coalition, which was convened by risk-monitoring software company Solidus Labs, is also urging digital currency companies to sign a “market integrity” pledge that acknowledges the potential for fraud in the cryptocurrency space and the need for the industry to protect investors.

“It really is about recognizing that you need entities that are focused on a fair and orderly system here, and really trying to prevent the abuses that can happen if you’re not paying attention,” said Kathy Kraninger, vice president of regulatory affairs at Solidus Labs and former director of the Consumer Financial Protection Bureau.

Regulators remain worried about the safety of investors in this new market despite it being a popular one. This new pledge and alliance comes at a time when regulators are still concerned. The Securities and Exchange Commission cited market manipulation potential as one reason for rejecting numerous applications for spot Bitcoin exchange-traded funds.

Most recently, the markets regulator vetoed a proposal from Fidelity’s Wise Origin Trust to offer an ETF that would track the cryptocurrency, determining that it did not meet the standards designed to prevent fraudulent and manipulative practices.

The Bank for International Settlements demanded more regulation safeguards in December to stop crypto fraud. They argued that DeFi is vulnerable to market manipulation and illegal activity due to the restricted application of rules against money laundering.

This new promise is a significant acknowledgement of fraud in cryptospace, but it is not yet clear how decentralized finance can stop bad actors.

CrossTower is also a founding member of the alliance. BitMex and GSR are Bitstamp, Bitstamps, Elwood, CryptoCompare and Securrency.

The coalition should help to “harmonize financial integrity standards” across market participants as many await more regulatory clarity, said Dante Disparte, chief strategy officer and head of global policy at Circle.

“Integrity is paramount to the progress and ability of our industry to continue innovating and building an infrastructure that delivers on the promise of access to financial resources for all,” he said.

While the initial focus of the group is to recruit additional companies to its pledge, CMIC hopes that eventually it will be able to engage regulators and promote training programs, endorse data-sharing structures, and address any concerns regarding transparency in cryptocurrency.