IOSCO Offers 18 Policy Proposals To Avoid Catastrophic Crypto Events

Key Points:

• After a spate of industrial blow-ups, IOSCO produced suggestions for authorities to tighten their requirements.
• The 18 policy proposals address a wide variety of concerns, including market misuse, conflict of interest, client asset protection, disclosures, and crypto hazards.
• The failure of FTX has provided new motivation for authorities to tighten or set standards.

On Tuesday, the International Organization of Securities Commissions (IOSCO) invited public opinion on its regulatory suggestions for crypto and digital asset markets.

The umbrella body for global market regulators, IOSCO, presented suggestions on Tuesday for authorities to tighten their standards in the aftermath of a spate of industrial blow-ups.

The 18 policy proposals address a wide variety of concerns, including market misuse, conflict of interest, client asset protection, disclosures, and crypto hazards. According to a news release, the suggested proposals primarily address “widespread concerns over investor safety and market integrity” in crypto marketplaces. IOSCO secretary-general Martin Moloney told the Financial Times:

“The diversity we’ve got at the moment across jurisdictions is not that they’re moving in different directions, but that they haven’t gone far enough in the direction that they all know they should go in.”

The watchdog said it hoped to complete the standards by the end of the year and that its 130 members across the globe would use them to quickly fill gaps in national rulebooks.

Last year, the worldwide policy forum that brings together securities regulators from about 130 nations formed a Fintech Task Force (FTF) to create IOSCO’s regulatory agenda for both fintech and cryptocurrency. The Monetary Authority of Singapore chairs the FTF, which is made up of 27 of the 33 board member states.

The Financial Conduct Authority, one of two working groups affiliated with the FTF, was due to submit recommendations for crypto assets this year, while the Securities and Exchange Commission focused on decentralized finance (DeFi).

IOSCO, an umbrella organization of regulators including the Securities and Exchange Commission of the United States, the Financial Services Agency of Japan, the Financial Conduct Authority of the United Kingdom, and the BaFin of Germany, is polling the public on the rules.

The move comes after the European Union finalized the world’s first complete set of guidelines earlier this month, putting pressure on the United Kingdom, the United States, and other nations to develop their own standards.

After the collapse of stablecoin producer Terra and crypto exchange FTX last year, global standard-setters have renewed their push for stronger crypto rules. The Financial Stability Board (FSB) is expected to publish proposals for stablecoins later this year, and future global crypto laws will be based on a joint FSB-IMF synthesis document.

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