The International Organization of Securities Commissions (Iosco) has published a series of policy recommendations for regulators looking to supervise crypto and digital assets.
Iosco’s role is to develop standards for securities market regulators and it has issued its proposals in the wake of the FTX scandal, which broke just over a year ago.
The Iosco report focuses on six areas of concern for crypto asset service providers (CASPs). It is guided by the ‘same activity, same risk, same regulatory outcome’ principle other regulators have adopted.
The six areas include conflicts of interest, market manipulation, insider trading and fraud, custody and client asset protection, cross-border risks and regulatory cooperation, operational and technological risk, and retail distribution.
Iosco chair Jean-Paul Servais described the report as “the first and important step to ensure investors are protected and crypto-asset markets operate fairly, efficiently and transparently”.
He also said the proposals are a vital component of the international framework envisaged for these markets by the G20 and the Financial Stability Board.
Servais added that Iosco’s attention would now turn to ensuring that its proposed framework is adopted and implemented consistently by Iosco members.
The report comes six months after Iosco’s secretary general, Martin Moloney, called on global regulators to show more urgency in supervising or “taming” crypto and digital assets markets.
He told the Financial Times that jurisdictions had not gone far enough in reining in the “wild west” of finance.
“What we would say to jurisdictions is just push ahead. They’ve all got different legal frameworks, different regulatory frameworks. Just push ahead, do it to this standard as quickly as you can,” said Moloney.