IOSCO Unveils Global Policy Framework for Crypto Market Regulation

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Key Takeaways

  • IOSCO aims to enhance the regulatory framework governing crypto markets.
  • Identified domains include conflicts of interest from vertical integration, market manipulation, insider trading, and fraud among others.

In a significant move towards global regulatory coherence, the International Organization of Securities Commission (IOSCO) has unveiled its conclusive report containing comprehensive policy suggestions for the regulation of crypto and digital asset (CDA) markets. 

As the global standards setter for securities markets regulation, IOSCO initiated consultations in May to address critical issues within the crypto sector, encompassing market abuse, conflict of interest, client asset protection, disclosures, and risks associated with crypto.

The long-awaited recommendations are designed to foster a unified global regulatory response to the risks posed by crypto asset service providers (CASPs), emphasizing investor protection and market integrity. IOSCO’s report provides specific and focused recommendations, offering a thorough explanation of regulatory expectations. 

These expectations, as outlined in the report, can be addressed by either applying existing rules or developing new ones, depending on the jurisdiction’s needs. 

According to the accompanying press release, the Crypto and Digital Assets (CDA) recommendations set a robust global regulatory foundation, ensuring that CASPs adhere to business conduct standards applicable in traditional financial markets. The report highlights six critical domains that the recommendations cover, aligning with IOSCO’s overarching goals and principles for securities regulation, as well as relevant supporting standards, recommendations, and best practices.

The identified domains include 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. By addressing these key areas, IOSCO aims to enhance the regulatory framework governing crypto markets, promoting transparency, and safeguarding investor interests.

IOSCO, an association of securities and futures regulators, comprises a board of 35 regulators and top executives, including 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.

In its earlier 2022 reports, IOSCO delved into topics such as decentralized finance (DeFi), stablecoins, and influencers. The organization recommends that national regulators acquire supervisory capacities, including channels to report consumer complaints for misleading and illegal promotions, and evidence-tracking processes to cope with the fast-paced and evolving nature of online information.

As the crypto landscape continues to evolve, IOSCO’s comprehensive recommendations mark a pivotal step in creating a standardized and globally coherent regulatory framework for the burgeoning digital asset markets. 

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Saniya Raahath
Saniya Raahath

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