In a bid to bring greater certainty to the regulation of cryptoassets and trading, the International Organization of Securities Commissions (IOSCO) launched a consultation on a set of standards.
The recommendations, which IOSCO aims to finalize by the fourth quarter, are intended to ensure greater consistency in crypto oversight among regulators around the world, while addressing long-standing regulatory concerns about investor protection and market integrity in the sector.
The principles-based recommendations aim to apply IOSCO’s global standards for securities regulation to crypto markets, covering a broad range of activities including offering, trading, settlement, market surveillance, custody, and marketing to retail investors.
The proposals also establish a benchmark for enhanced cooperation between regulators to deal with cross-border challenges in enforcement and supervision, along with concerns about regulatory arbitrage.
The proposed recommendations do not cover the so-called “decentralized finance” (DeFi) sector, which will be addressed in a separate effort expected later this summer.
The recommendations “set expectations and guardrails to regulate and supervise crypto-asset markets, which are inherently cross-border in nature,” said Lim Tuang Lee, chair of IOSCO’s Fintech Task Force, in a release.
“Crypto-asset service providers need to address unacceptable conflicts of interest and take far more seriously the right of clients to have their monies and assets carefully minded and accounted for. It is time for regulators to work together across borders and various jurisdictions to ensure that investor protection and market integrity are upheld in crypto-asset markets.”
The consultation is open until July 31.
IOSCO said that after it finalizes its recommendations, regulators around the world would be expected to review their existing frameworks for regulating crypto markets to ensure that they comply with the standards, and to promptly fix any gaps.