6 Recommendations for a Safer Crypto Market: IOSCO Takes Action

6 Recommendations for a Safer Crypto Market: IOSCO Takes Action


IOSCO has made policy recommendations to make the fast-changing crypto market comply with rules and regulations, aiming to make it safe for investors and promote trust and stability in the evolving world of cryptocurrency.

IOSCO has made progress in dealing with concerns in the fast-changing cryptocurrency market In their recent consultation report, IOSCO shared its policy recommendations. 

To make these markets safe for investors, these recommendations intend to make them comply with regulations and regulations. Digital currency’s evolving world needs trust and stability, and IOSCO promotes them.

Cryptocurrency Industry Prepares for Regulatory Changes

Cryptocurrency and Digital Investment Recommendations (CDA Recommendations) follow IOSCO’s proven securities regulation approach. These recommendations are not mandatory, but they offer valuable guidance on how to regulate the cryptocurrency market. 

Cryptocurrency can attract more institutional financing and boost investor confidence by implementing these recommendations.

The recommendations focus on 6 main areas that align with IOSCO standards. Cryptocurrency industry concerns are addressed in the recommendations. Conflicts of interest, insider trading, and market manipulation are between them.

Additionally, they manage cross-border transaction dangers, safeguard client assets and custody, mitigate technology and operational dangers, and keep cryptocurrency assets fair.

Instead of attempting to develop a universal, detailed classification system, IOSCO has adopted a practical, cost-effective approach to addressing risks.

All regulatory authorities can use these recommendations as a general guide. IOSCO encourages members to apply these principles consistently to accomplish desired outcomes.

The report recommends aligning regulatory outcomes for investor protection and market integrity in crypto-assets with those of traditional financial markets. This intends to set up a level playing field and minimize the danger of regulatory arbitrage.

United Kingdom Treasury Committee: Treat Digital currency Trading as Gambling?

Digital currencies should be treated like traditional assets, not what the United Kingdom Treasury Committee wants them to be. Instead of regulating digital currency trading as a financial service, it should be regulated as gambling.

The Treasury Committee made its recommendation following an investigation into the digital currency industry. Investors aren’t properly protected by existing regulations, reports by the inquiry. 

To strengthen consumer safety, the committee proposed bringing digital currency trading under the jurisdiction of the Gambling Commission.

Contrarily, the IOSCO recommendation suggests treating digital currencies similarly to traditional financial assets. The idea is to make crypto-assets and traditional financial markets more fair so regulatory authorities can’t exploit them.

Owing to regulatory uncertainty and a lack of clear guidelines, the crypto- investment industry has faced challenges. The IOSCO recommendations provide a framework for compliant markets, which is good for the industry. The move by IOSCO is a great step towards enhancing transparency and minimizing risks.

IOSCO’s recommendations aren’t obligatory, and individual jurisdictions can adopt them. With more regulation and transparency, IOSCO’s recommendations remain unclear. These jurisdictions will determine the implementation and impact of the recommendations.

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