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International watchdog launches consultation on crypto regulations

International watchdog launches consultation on crypto regulations

As the cryptocurrency industry finds itself under a massive regulatory crackdown around the world, especially in the United States, an international association of 130 securities and futures watchdogs has revealed a set of standards and measures to control the space around the world.

Indeed, the International Organization of Securities Commissions (IOSCO) has started a consultation process until the end of July on the 18 policy recommendations for managing crypto and digital asset markets, including stablecoins, that it shared with the public on May 23.

Issues covered

Specifically, the offered measures cover a broad range of issues, including conflicts of interest, cross-border regulatory cooperation, custody of cryptocurrencies, operational risks, market manipulation, insider trading and fraud, as well as treatment and protection of retail customers.

In fact, as the global organization explained:

“One of IOSCO’s goals is to promote greater consistency with respect to how IOSCO members approach the regulation and oversight of crypto-asset activities, given the cross-border nature of the markets, the risks of regulatory arbitrage and the significant risk of harm to which retail investors continue to be exposed.”

On top of that, it seeks to foster “optimal consistency in the way crypto-asset markets and securities markets are regulated within individual IOSCO jurisdictions, in accordance with the principle of ‘same activities, same risks, same regulatory outcomes.’”

According to Lim Tuang Lee, the chair of the IOSCO Board-Level Fintech Task Force that is working on developing the policy recommendations, crypto service providers need to address “unacceptable conflicts of interest and take far more seriously the right of clients to have their monies and assets carefully minded and accounted for.”

What does industry think

In his comments shared with Finbold on May 23, Mikkel Morch, Chairman and Non-Executive Director at digital investment fund ARK36, said:

“While the proposed standards hold the promise of enhancing investor protection, it is important to strike the right balance between regulation and innovation to foster continued growth and development in this dynamic industry.”

At the same time, Bradley Duke, co-CEO at European crypto investment product company ETC Group, hailed them as “definitely a step in the right direction,” adding that his company welcomes “any well-considered regulation or digital assets guidance that increases investor protections as this helps to bring confidence and stability to this nascent sector.”

Meanwhile, crypto companies in the US are struggling with the lack of regulatory clarity that has led to the legal battle between the US Securities and Exchange Commission (SEC) and Ripple, in which the agency is accusing the blockchain company of breaking the law by selling the XRP token, which it considers a security.

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