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Experts from ETC Group and ARK36 comment on the first global plans, proposed by the international watchdog IOSCO, to regulate crypto.
In a significant move towards strengthening the regulation of the cryptocurrency market, the International Organization of Securities Commissions (IOSCO) proposed today 18 measures to cover conflicts of interest, market manipulation, cross-border regulatory cooperation, custody of cryptoassets, operational risks, and treatment of retail customers. This is the first global approach to regulating cryptoassets and digital markets.
ETC Group and ARK36 have been looking into this and share their views with us.
Bradley Duke, co-CEO at ETC Group, commented:
“At ETC Group we welcome any well considered regulation or Digital Assets guidance that increases investor protections as this helps to bring confidence and stability to this nascent sector. The IOSCO global approach is definitely a step in the right direction.”
Mikkel Morch, Chairman and Non-Executive Director at ARK36, commented:
"This initiative comes in response to the collapse of the FTX exchange last year, which raised concerns about consumer protection and highlighted the need for a coordinated regulatory framework.
Until now, the cryptocurrency industry has largely operated with limited oversight, primarily focusing on anti-money laundering checks. However, with different jurisdictions adopting their own rules, the lack of harmonisation has created a fragmented regulatory landscape. The proposed global standards aim to address this issue and provide a comprehensive framework that will enhance investor protection and market integrity.
The bankruptcy proceedings initiated by FTX in the United States last November triggered global regulators' intervention due to a liquidity crisis. These events served as a wake-up call for the industry and highlighted the urgency of establishing a coordinated global approach to cryptocurrency regulation.
The recommendations put forth by IOSCO represent a significant turning point in the industry and could indeed mark a step towards mitigating the risks associated with investor protection and market integrity. The proposed measures cover a wide range of areas, including conflict of interest, market manipulation, cross-border regulatory cooperation, custody of cryptoassets, operational risks, and the treatment of retail customers.
By applying long-established safeguards from mainstream markets, the proposed standards aim to eliminate conflicts of interest between different parts of a crypto transaction. IOSCO plans to finalize these standards by the end of the year, urging its 130 members worldwide to swiftly integrate them into their rulebooks to address existing regulatory gaps.
IOSCO, an umbrella group comprising regulators such as the U.S. Securities and Exchange Commission, Japan's Financial Services Agency, Britain's Financial Conduct Authority, and Germany's BaFin, is actively seeking public opinion on the proposed regulations. This inclusive approach ensures that various stakeholders, including investors and industry experts, have the opportunity to contribute their insights and expertise.
This move by IOSCO follows the European Union's recent implementation of the world's first comprehensive set of rules for cryptocurrencies. Consequently, there is mounting pressure on other major economies, including the United States and the United Kingdom, to develop their own regulatory frameworks to keep pace with global standards.
As the cryptocurrency market continues to grow in size and influence, establishing a robust global regulatory framework is essential to safeguard investors' interests and ensure the long-term stability and integrity of the market. 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.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.