A band of traders looking to bring rules to the crypto market continues to pick up steam, and now they're toying with the idea of a 'white list' to separate the wheat from the chaff.

The group, dubbed CORA, has been meeting in recent months to create new standards for the over-the-counter (OTC) trading in cryptocurrency. Jump Trading, Mike Novogratz's Galaxy Digital, and DRW's Cumberland are among some of the participants in the 50-member group. Previously, the group met in Singapore to discuss building out a clearing house for the market. In an interview with The Block, Simon Nursey, co-founder of CORA, discussed the group's recent meeting in Chicago and the idea to create a so-called "white list" for the market.

"The issue is that there aren't any good standards," Nursey said. "Think of it more like an ISO certification to trade. We want to grow the market by bringing together professional dealers. Think of it as more of a white list."

Indeed, cryptocurrency markets are a "Wild West" when it comes to trading standards. When a large desk wants to trade with another desk, they're typically not on the same page about documenting those trades, what would constitute a default, and what the floor is for know-your-customer procedures. OTC firms that meet the minimum standards across these different verticals could be added to such a white list. To be clear, it's not a sure thing the list will come to fruition.

"The idea isn't to restrict dealers from engaging with the counter-parties they want to engage with, but to have a standard to fall upon and will allow the market to scale," Nursey added.

When settlement?

Settlement is one area the group is considering creating standards around. In crypto, different brokers have different expectations for when counter-parties' funds should settle. It is also not always clear when it is appropriate to default on a counter-party and what the penalties for defaulting are.

"What constitutes default? It's not always clear," Nursey said. "The idea of having definitions is a starting point."

Those definitions exist on Wall Street, says Larry Tabb, founder of consultancy Tabb Group.

"Stocks now settle T+2. Two days after they trade," he said. "And the morning of T2 — cash and securities move."

The lack of trading standards hasn't been given the same attention as other market structure deficiencies in crypto, such as the lack of prime-brokers and proper custodians in the market. But it is something that could help lure in new market participants, including large Wall Street investors, Nursey said.