Global securities regulators are monitoring the emerging crypto asset sector, but aren’t yet seeking to establish global standards for crypto trading platforms.
The International Organization of Securities Commissions (IOSCO) has issued a report detailing the risks associated with crypto trading, including concerns about platform access, asset safekeeping, price discovery, transparency and conflicts of interest.
Many of these same issues arise in the regulation of traditional securities trading too, the report noted. So, to the extent that particular crypto assets are considered to be securities, “the basic principles…of securities regulation should apply,” the report said.
However, crypto trading platforms may also raise novel regulatory concerns due to their particular business models, IOSCO warned.
The report said that some regulators have determined that their existing frameworks for overseeing traditional trading venues will also apply to crypto trading, but that some are also considering new requirements “to account for the novel and unique characteristics” of crypto trading.
The group’s report — which was prepared by an IOSCO committee led by the Ontario Securities Commission (OSC) — aims to help individual regulators identify the issues raised by crypto trading and look at ways regulators around the world have started to deal with these issues.
“These key considerations and toolkits are intended to assist regulatory authorities who may be evaluating [crypto trading platforms] within the context of their regulatory frameworks,” the report said.
At the same time, the group isn’t proposing to set global standards for regulating crypto trading.
IOSCO said that it will “continue to monitor the evolution of the markets for crypto-assets, with a view to ensuring that the issues, risks and key considerations identified in this report remain relevant and appropriate.”
In Canada, the regulation of crypto trading remains a work in progress.
Last March, the Canadian Securities Administrators (CSA) and the Investment Industry Regulatory Organization of Canada published a joint consultation paper that sets out a proposed framework for regulating crypto trading platforms in Canada.
Earlier this year, the CSA published guidance to help clarify when traditional securities rules may apply to crypto trading.