Global Securities Body IOSCO Unveils Crypto Regulatory Framework Proposals – The International Organization of Securities Commissions (IOSCO), a global regulatory authority for securities markets, has issued a comprehensive report outlining policy recommendations for crypto and digital asset (CDA) markets. This report offers a detailed overview of regulatory expectations in this domain.
The recommendations in the report are vital for shaping a cohesive global regulatory strategy to tackle significant risks to investor protection and market integrity associated with centralized crypto asset intermediaries, commonly referred to as crypto asset service providers (CASPs). IOSCO’s precise and targeted suggestions offer a comprehensive clarification of regulatory expectations.
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The report suggests that meeting these expectations can involve either applying existing rules or establishing new ones, depending on the jurisdiction. The goal is to address the identified crucial areas of harm within these markets. As per the report, the recommendations for crypto and digital assets (CDA) create a distinct and robust global regulatory framework, ensuring that crypto asset service providers (CASPs) comply with business conduct standards comparable to those in traditional financial markets.
The recommendations cover vital areas that align with IOSCO’s objectives and principles for securities regulation, along with relevant supporting standards, recommendations, and best practices. The report identifies key domains, including conflicts of interest from vertical integration, market manipulation, insider trading, fraud, custody, client asset protection, cross-border risks, regulatory cooperation, operational and technological risk, and retail distribution.
The IOSCO board consists of 35 regulators and senior executives, including leaders from entities such as the United States Commodity Futures Trading Commission, the U.S. Securities and Exchange Commission, and the United Kingdom’s Financial Conduct Authority, among others. In 2022, the organization released reports on DeFi, stablecoins, and influencers.
The supervisory capabilities recommended by IOSCO for national regulators include establishing regulatory channels to address consumer complaints related to misleading and illegal promotions and implementing processes to track evidence swiftly in response to the dynamic and rapidly changing nature of online information.