Crypto regulation: Watchdog proposes the first set of rules for the sector
%2Favatars%2FUy0OTzksC7lW.jpg&w=96&q=75)
%2F2023%2F05%2F23%2Fimage%2Fjpeg%2FyzWrGW505WNq1Z5RnVxgbqGBDW0y0GWalqn0SyYG.jpg&w=3840&q=75)
The International Organization of Securities Commissions (IOSCO), the global watchdog for international securities, has proposed the first set of rules for regulating cryptocurrency-based assets and digital markets, Reuters reported. This is significant development following consumers' massive losses with the collapse of cryptocurrencies last year.
Even after being in vogue for many years, cryptocurrency and similar digital assets do not have regulations in place that offer consumer protection. At large, the industry only complies with anti-money laundering policies of governments and ad-hoc regulations that vary across jurisdictions globally.
With the collapse of the cryptocurrency exchange FTX last year, there is an urgent need to ensure that investments are protected and risks of market integrity addressed. After deliberations between the members, the IOSCO unveiled its first set of global rules for the sector.
Proposed regulations for crypto assets
The international securities watchdog's regulations address "conflict of interest, market manipulation, cross-border regulatory cooperation, custody of crypto assets, operational risks, and treatment of retail customers," according to Reuters.
The watchdog has used its experience in regulating international assets and applied measures typically used in conventional markets to cover different parts of the transactions in the crypto industry as well.
The recommendations proposed this week have been dubbed a "turning point" for the crypto industry by the chair of IOSCO, Jean-Paul Servais. The regulator aims to finalize the proposed standards by the end of the year, following which the 130 member nations could use them to address gaps in their regulations and lead to a more uniform policy across the globe.
IOSCO's members include the Securities and Exchange Commission (SEC) of the U.S., the Financial Services Agency of Japan, the Financial Conduct Authority of Britain, and BaFin from Germany.
The move comes close on the heels of the European Union (EU) finalizing its rules for the crypto industry last month, which also put pressure on Britain and the U.S. to formalize their own.
Regulation for the crypto industry has been a long-standing demand, even from businesses in the sector. The lack of regulations provides no security cover for investors when a firm becomes insolvent.
After riding on the pandemic wave for over two years, crypto-based assets faced a major setback last year. Changes in macroeconomic conditions led the U.S. Federal Bank to tighten its monetary policy, and the cost of borrowing increased.
With central banks maintaining their stringent policies even now, crypto assets are unlikely to see a major upswing anytime soon. Hopefully, nations would have put regulatory safeguards in place by then.
SHOW COMMENT (1)
/2023/06/07/image/jpeg/a26g5czwbmM676TAlvhpmVS5W71Gi9vkz4LO0yMA.jpg "New 621-mile range EV battery charges in six minutes and works in any weather")
/2023/05/31/image/jpeg/cBPsRNE1Kc9USJTb6RvLg98fqY30HyEbhqfnvWg8.jpg "Advancing fusion energy: Researchers achieve record-breaking temperatures in a tokamak")
/2022/08/14/image/jpeg/ITYI0dk3gliRxi88A6y6NPlQ1AvPuZFkb2byyaZH.jpg "Stranger Earth: Six weird ways climate change is affecting our planet")
/2023/06/03/image/jpeg/LJsTJ6HYfeZoh6Hlc4JLiP05g8ykKNa1WXClqVwX.jpg "Scientists detect the breath between atoms")
/2022/11/10/image/png/QpMgviC2T9LhKNrtWQo9UOC9tU59f9gcQO0pf04l.png "In a world-first, an undeclared type of ice loss in the Arctic has been measured")
/2023/05/28/image/jpeg/X1sB2puBpxN1VWCWMDkaa7Uwd2FUAdOP6AxTp8T8.jpg "NGAD: The chosen one - US Air Force commits to sole 6th-generation fighter")
/2023/06/03/image/jpeg/MwGIp61b2PM577qboU4pfCmoiPEju8IbV9fCHbx8.jpg "Hawking was right: All large objects will eventually evaporate")
/2022/10/31/image/jpeg/ejv7qJJakhygNETf0VpoZ3Pv4kCpq1HNB77iXWdW.jpg "The 'Sputnik Moment' upended the global order once, but won't do so again")
/2022/09/14/image/jpeg/WZrScJPvZvRmiE9JiG5h4GGAqbmsNwiOruqieEwp.jpg "This space debris removal company is on a singular mission to clean Earth's orbit")
/2022/09/23/image/png/J1j5DhjiFAHjb2Wcf1FzGykxeuoseD5Dn4au012r.png "How you could develop US military tech")