International securities regulator proposes framework for crypto assets

The International Organization of Securities Commissions (IOSCO) has proposed the first-ever global approach for regulating the crypto asset and digital markets. This game-changing development aims to fortify consumer protection and uphold market integrity across the expansive and evolving crypto landscape.

In a paradigm shift for crypto finance, IOSCO has proposed a groundbreaking regulatory framework for the crypto asset and digital markets. 

This significant step, spurred by last year’s FTX exchange collapse and a call for standardized rules by the crypto industry, has opened the door to a more secure and streamlined global crypto landscape.

Jean-Paul Servais, the Chairman of IOSCO, characterizes the proposed regulations as a “turning point,” marking a concerted effort to address pressing risks to investor protection and market integrity. 

With a firm footing in established financial markets’ safeguards, the IOSCO proposals aim to manage a broad spectrum of potential issues, from conflicts of interest and operational risks to market manipulation.

Filling the regulatory void

IOSCO’s policy recommendations, now open for public comment, emphasize the urgency of a globally harmonized regulatory approach for crypto markets, which currently navigate divergent rules across jurisdictions. 

IOSCO’s vision is for its 130 members, including prominent regulators like the US Securities and Exchange Commission (SEC) and Britain’s Financial Conduct Authority (FCA), to adopt these guidelines and address regulatory gaps in their jurisdictions.

Accelerating fintech innovation through task forces

The push for these regulatory standards was strengthened by establishing the Fintech Task Force (FTF) last year, a move reflecting IOSCO’s commitment to the fintech and crypto sectors. 

Chaired by the Monetary Authority of Singapore, the FTF boasts 27 of the 33 board member jurisdictions. With specialized working groups overseen by the FCA and the SEC, the FTF is set to publish further crypto and decentralized finance (DeFi) recommendations this year.

Greater transparency and investor protection

The announcement of these standards signals a pivotal moment in the crypto sector’s evolution. While the path to total compliance may be challenging, this global initiative underscores IOSCO’s commitment to fostering a secure, regulated crypto environment.

Jean-Paul Servais, Chairperson of IOSCO, asserted, “The time has come to end the regulatory uncertainty that characterizes crypto activities.” 

As the consultation period on these recommendations closes on July 31, the world is poised for an exciting new chapter in crypto regulation.