The International Organization of Securities Commission (IOSCO) has released its highly anticipated policy recommendations for the regulation of crypto and digital asset (CDA) markets. Meanwhile, this milestone publication, aimed at addressing investor protection and market integrity risks, marks a significant step towards a coordinated global regulatory framework.
Notably, the recommendations come as a response to the challenges posed by crypto exchanges or crypto asset service providers (CASPs).
IOSCO’s Final Recommendations
In its comprehensive report, IOSCO introduces six key areas of focus for regulating CDA markets. These areas include conflicts of interest arising from vertical integration, market manipulation, insider trading, and fraud, custody and client asset protection, cross-border risks, operational and technological risk, and retail distribution.
Meanwhile, the recommendations aim to establish a clear and robust international regulatory baseline, ensuring that CASPs adhere to the same standards of business conduct as traditional financial markets.
Notably, IOSCO Chair Jean-Paul Servais expressed satisfaction with the report, highlighting its crucial role in investor protection and the fair, efficient, and transparent operation of crypto asset markets. In addition, he emphasized the report’s significance within the international crypto regulation framework envisioned by the G20 and FSB.
Looking ahead, the focus shifts to the adoption and implementation of these recommendations across IOSCO member jurisdictions.
How is The Crypto Market Responding?
Talking about the report, Tuang Lee Lim, Chair of the IOSCO Board-Level Fintech Task Force, emphasized that the regulatory approach aligns with IOSCO’s existing principles and standards for securities markets regulation. The recommendations, rooted in the principle of “same activity, same risk, same regulatory outcome,” reflect an outcomes-focused strategy.
In addition, these recommendations set the stage for a recalibration of the crypto regulatory landscape, emphasizing global cooperation and consistency. Meanwhile, the next critical phase involves the adoption and implementation of these measures to ensure optimal regulatory uniformity across IOSCO member jurisdictions.
As the cryptocurrency industry continues to evolve, IOSCO’s guidance seeks to strike a balance between innovation and investor protection on a global scale.
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