Key Takeaways
- IOSCO has released a report with policy suggestions for regulating crypto and digital asset markets globally.
- The recommendations aim to align the business conduct of crypto asset service providers with conventional financial market standards.
- The report covers a wide range of regulatory domains, reflecting IOSCO's commitment to enhancing investor protection and market integrity in the digital asset sector.
The International Organization of Securities Commissions (IOSCO), the global body responsible for regulating securities markets, has issued a critical report outlining policy recommendations for regulating crypto and digital assets (CDA).
The recommendations are pivotal in shaping a cohesive global regulatory system that aims to manage risks related to investor protection and market integrity, especially concerning crypto asset service providers (CASPs).
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IOSCO's detailed recommendations propose applying existing regulations or formulating new ones to mitigate the risk areas in the CDA markets.
The organization emphasizes that the best practice would be creating a robust regulatory framework for CASPs, aligning them with the standards observed in traditional financial markets.
The report identifies several key domains requiring regulatory focus, including managing conflicts of interest, preventing market manipulation, insider trading, fraud, ensuring the safety of custody and client assets, addressing cross-border risks, facilitating regulatory cooperation, and managing operational and technological risks.
These domains align with IOSCO's overarching principles and goals for securities regulation, encompassing relevant standards, recommendations, and best practices.
IOSCO's 35-member board supports these recommendations, including prominent figures from the US Commodity Futures Trading Commission, the US Securities and Exchange Commission, and the United Kingdom's Financial Conduct Authority.
In 2022, IOSCO also published insightful reports on decentralized finance (DeFi), stablecoins, and the impact of influencers in the digital asset space.
The body advises national regulators to enhance their supervisory capabilities, including establishing mechanisms for consumer complaints regarding misleading or illegal promotions and developing processes to track the rapidly changing online information.
IOSCO's newly released policy recommendations mark a significant step towards establishing a global regulatory framework for crypto and digital asset markets. The recommendations aim to align CASPs with traditional financial market standards and enhance investor protection and market integrity.
