The International Organization of Securities Commissions (IOSCO) has released a comprehensive report outlining policy recommendations for crypto and digital asset markets. The suggestions focus on mitigating the risks to investor protection and market integrity posed by centralized crypto asset service providers (CASPs). This development marks a significant step toward establishing a unified global regulatory framework for the rapidly evolving crypto space.
The International Organization of Securities Commissions (IOSCO), a global regulatory body overseeing securities markets, has unveiled a detailed report containing policy recommendations for crypto and digital asset (CDA) markets. This report aims to address the substantial risks associated with centralized crypto asset service providers (CASPs) and establish a unified global regulatory approach.
The recommendations within the report are designed to create a robust global regulatory foundation, ensuring that CASPs adhere to business conduct standards comparable to those in conventional financial markets. The report emphasizes the importance of addressing critical areas of harm in CDA markets, promoting investor protection and maintaining market integrity.
The specific domains covered in the recommendations align with IOSCO's principles for securities regulation and relevant supporting standards, recommendations, and best practices. The report identifies key areas, 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, consisting of 35 regulators and top executives from entities such as the U.S. Commodity Futures Trading Commission, the U.S. Securities and Exchange Commission, and the UK’s Financial Conduct Authority, emphasizes the need for a unified approach to crypto regulations. The report suggests that jurisdictions can address these expectations by applying existing rules or introducing new ones, depending on their regulatory landscape.
This development follows IOSCO's earlier reports in 2022, covering topics such as decentralized finance (DeFi), stablecoins, and influencers in the crypto space. The organization's continued focus on the regulatory aspects of the crypto industry reflects the growing importance of addressing risks and ensuring investor protection in this rapidly evolving sector.
The policy recommendations put forth by IOSCO highlight the need for supervisory capacities, including regulatory channels for reporting consumer complaints related to misleading promotions and evidence-tracking processes, to address the dynamic nature of online information. The report signals a collaborative effort among global regulators to create a regulatory framework that fosters responsible and secure growth in the crypto and digital asset markets.
In summary, IOSCO's comprehensive policy recommendations represent a significant milestone in shaping the regulatory landscape for crypto asset markets. As global regulators work towards establishing common standards, these suggestions aim to enhance investor protection, promote market integrity, and address the challenges posed by CASPs in the evolving digital asset space.
(AMAKA NWAOKOCHA, COINTELEGRAPH, 2023)