Securities Regulator Releases Global Crypto Market Policy Recommendations

• Global Standards Setter IOSCO Rejects Crypto Industry's Request for Unique Stablecoin Regulations
• Regulating Crypto to Mitigate Risk
• Equating CASPs with Traditional Financial Markets
• Accountability for Financial Influencers
• Rejection of Unique Stablecoin Regulation
• Impact on Crypto Firms

Global Standards Setter IOSCO Rejects Crypto Industry's Request for Unique Stablecoin Regulations

The International Organization of Securities Commissions (IOSCO), a global regulator for securities markets, has turned down the crypto industry's plea for a unique regulatory framework for stablecoins. However, the organization agreed to the need for greater accountability from financial influencers in the crypto market.

Regulating Crypto to Mitigate Risk

The IOSCO published its recommendations for the regulation of cryptocurrencies on Friday, following a consultation period that commenced in May. These guidelines aim to pave the way for a harmonised global regulatory approach to the risks posed by Crypto Asset Service Providers (CASPs) within the organization's member group. According to IOSCO, these risks include market abuse, conflict of interest, client asset protection, and disclosure issues.

Equating CASPs with Traditional Financial Markets

Tuang Lee Lim, the chair of IOSCO's financial task force, stated that the activities of CASPs and the risks they pose are often similar to those observed in conventional financial markets. Thus, the regulatory approach adopted is in line with IOSCO's principles and associated standards for securities markets regulation.

Accountability for Financial Influencers

The report acknowledged that many respondents sought greater accountability from financial influencers in the crypto space. In response, IOSCO suggested that regulators should collaborate with other relevant authorities to ensure accurate disclosure of the product, service, and associated risks in crypto promotions. Additionally, CASPs should disclose any commercial arrangements with individuals offering investment advice on crypto assets traded on their platforms.

Rejection of Unique Stablecoin Regulation

Various respondents, including numerous blockchain industry associations, voiced support for a unique regulatory framework for stablecoins, arguing that current requirements are overly onerous. However, IOSCO dismissed these claims, solidifying its stance that its rules are applicable to stablecoins as well. IOSCO, as the international policy forum for securities regulators, has members that oversee more than 95% of the world's securities markets across approximately 130 jurisdictions.

Impact on Crypto Firms

Crypto firms worldwide are feeling the effects of these regulatory shifts, with some choosing to suspend services in certain locations, such as the U.K.

Edited by Jonathan Stoker