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IOSCO Puts into Perspective the Regulatory Expectations of the Crypto Market

IOSCO puts into perspective the regulatory expectations of the crypto market:

  • IOSCO proposes different suggestions to improve the regulatory framework of the cryptocurrency market.
  • This new IOSCO report focuses on investor protection.
  • The IOSCO initiative aims to preserve market integrity by establishing standards for Cryptocurrency Asset Service Providers (CASPs).

A new framework for crypto regulation?

The International Organization of Securities Commissions (IOSCO) recently published a report containing detailed recommendations and explanations regarding the regulatory framework for digital assets markets, including cryptocurrencies.

It’s important to note that IOSCO is an organization that includes over 35 regulators, with the Securities and Exchange Commission (SEC) and the Financial Conduct Authority (FCA) being part of it.

This report puts into perspective the regulatory approach of different regulators, which aims to mitigate risks for investors, primarily caused by centralized cryptocurrency asset intermediaries known as ‘Cryptocurrency Asset Service Providers (CASPs)’.

Recommendations to strengthen regulation

IOSCO’s recommendations provide a detailed explanation of regulatory expectations that can be met either by applying existing rules or by creating new ones, depending on the jurisdiction.

Furthermore, the report highlights critical areas such as conflicts of interest, market manipulation, insider trading, fraud, custody, client asset protection, regulatory cooperation, as well as operational and technological risks.

By establishing a regulatory foundation, IOSCO also aims to ensure that CASPs adhere to applicable business conduct standards in traditional financial markets.

It’s worth noting that in 2022, IOSCO had already published reports on decentralized finance (DeFi), stablecoins, and the influence of personalities on these markets.

As you can see, the IOSCO report emphasizes the importance of enhanced supervision in the cryptocurrency sector and suggests concrete measures for national regulators.

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