IOSCO issues recommendations for regulating crypto markets
IOSCO issues recommendations for regulating crypto markets
The International Organization of Securities Commissions (IOSCO) has issued recommendations for the regulation of cryptocurrency and digital asset (CDA) markets that address investor protection and market integrity risks.
In particular, the recommendations are primarily aimed at addressing issues arising from the activities of crypto exchanges or crypto asset service providers (CASPs).
The IOSCO report's suggestions create a clear and comprehensive international regulatory
framework to ensure that CASPs adhere to the same business requirements as traditional financial markets. In addition, they cover six key areas that are consistent with the organization's goals and principles:
1. Conflicts of interest arising from the vertical integration of activities and functions.
2. Market manipulation, insider trading, and fraud.
3. Safekeeping and protection of client assets.
4. Cross-border risks and regulatory cooperation.
5. Operational and technological risks.
6. Retail distribution.
Jean-Paul Servais, Chairman of IOSCO, said he fully supports the organization's report on cryptocurrency and digital asset markets, which is a first and important step in ensuring investor protection and the fair, efficient, and transparent functioning of cryptoasset markets.
"This report is a key component of the international framework for these markets envisioned by the G20 and the FSB," Servais said.
However, Tuang Lee Lim, chair of IOSCO's Fintech Task Force, noted that the regulatory approach is consistent with IOSCO's existing principles and standards for securities market regulation. All recommendations presented for cryptocurrency and digital asset markets are outcome-oriented and based on the principle of "same activity, same risk, same regulatory outcome".
IOSCO emphasized that the next important step for a unified regulation of cryptocurrencies will be the adoption and implementation of the developed measures.
In addition, the organization said that its main goal is to promote the development of markets, strengthen market infrastructure, and implement appropriate regulation.
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