March 5, 2024

Global securities body IOSCO unveils crypto regulatory framework proposals

According to the report, these expectations can be addressed by applying existing rules or creating new ones, depending on the jurisdiction.

IOSCO, the international regulatory body overseeing securities markets, has released its conclusive report containing policy suggestions for crypto and digital asset (CDA) markets.

The suggestions within this report play a crucial role in formulating a unified global regulatory approach to address the substantial risks to investor protection and market integrity posed by centralized crypto asset intermediaries known as crypto asset service providers (CASPs).

IOSCO’s specific and focused recommendations provide a thorough explanation of regulatory expectations. According to the report, these expectations can be addressed by applying existing rules or creating new ones, depending on the jurisdiction. The aim is to tackle the identified critical areas of harm in these markets.

Screenshot of the policy recommendations.  Source: IOSCO

According to the statement, the Crypto and Digital Assets (CDA) recommendations establish a distinct and strong global regulatory foundation. This ensures that Crypto Asset Service Providers (CASPs) adhere to the business conduct standards applicable in conventional financial markets.

The suggestions address crucial domains, aligning with IOSCO’s goals and principles for securities regulation and pertinent supporting standards, recommendations, and best practices. The report identifies six critical domains, covering 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.

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The IOSCO is an association of securities and futures regulators. Its board comprises 35 regulators and top executives, such as the heads of the United States Commodity Futures Trading Commission, the U.S. Securities and Exchange Commission, and the United Kingdom Financial Conduct Authority — among others.

Previously, in 2022, the organization published reports on DeFi, stablecoins and influencers. The supervisory capacities that the IOSCO recommends national regulators acquire include regulatory channels to report consumer complaints for misleading and illegal promotions and evidence-tracking processes to cope with online information’s fast pace and changing nature.

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