CASPs Must Prioritize Retail Investor Protection in Cryptoasset Distribution
The International Organization of Securities Commissions (IOSCO) has released its Final Report with Policy Recommendations for Crypto and Digital Asset (CDA) Markets. These recommendations are crucial for ensuring the protection of investors and the fair, efficient, and transparent operation of crypto-asset markets.
When it comes to retail distribution, Crypto-asset Service Providers (CASPs) need to prioritize the protection of retail investors. This involves implementing measures to ensure that retail investors fully understand the risks associated with investing in crypto assets and receive clear and accurate information about the products being offered.
CASPs should also have procedures in place to prevent the sale of cryptoassets to retail investors who may not be suitable for such investments based on their investment objectives, financial situation, and knowledge and experience in investing in cryptoassets.
Effective communication channels with retail investors should also be established to address any concerns or issues that may arise during the distribution process. Overall, the protection of retail investors is a critical aspect of CASPs’ operations, and it is essential that they prioritize this area to ensure that investors are treated fairly and have a clear understanding of the risks involved in investing in cryptoassets.
Quotes from IOSCO Representatives
According to IOSCO Chair Jean-Paul Servais, the publication of the IOSCO Report on Crypto and Digital Asset Markets is a major step forward in efforts to protect investors and ensure that crypto-asset markets operate with integrity. These recommendations will provide a clear and consistent regulatory framework for CASPs around the world.
Tuang Lee Lim emphasized that the regulatory approach taken in the IOSCO Report is consistent with IOSCO’s principles and associated standards for securities market regulation, as CASPs’ activities and risks frequently mirror those observed in traditional financial markets.
Global Regulatory Foundation for CASPs
The report establishes a global regulatory foundation for CASPs, aligning with IOSCO’s principles for securities regulation and supporting standards, recommendations, and best practices. It follows previous publications by IOSCO on DeFi, stablecoins, influencers, and recommends that national regulators acquire supervisory capacities such as reporting channels for misleading promotions and evidence-tracking processes for online information.
Hot Take
The IOSCO Final Report with Policy Recommendations for Crypto and Digital Asset Markets provides crucial guidance for protecting retail investors and ensuring fair operations within crypto-asset markets. It sets a global regulatory foundation for CASPs while aligning with established principles and standards for securities regulation. This marks a significant step towards establishing consistent regulatory frameworks across different jurisdictions, ultimately enhancing investor protection within the crypto market.
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