As the industry of digital currency finds itself under a substantial regulatory crackdown around the globe, especially in the United States, an international association of 130 securities and futures watchdogs has revealed a set of standards and measures to control the space around the world.
Nonetheless, the International Organization of Securities Commissions (IOSCO) has started a consultation process until the end of July on the 18 policy recommendations for managing cryptocurrency and digital investment markets, including crypto stablecoins, that it shared with the public on May 23.
In particular, the offered measures cover a broad range of issues, including conflicts of interest, cross-border regulatory participation, custody of digital currencies, operational dangers, market manipulation, insider trading and fraud, likewise as treatment and protection of retail customers.
In reality, as the worldwide organization explained:
“ 1 of IOSCO’s goals is to encourage greater consistency with respect to how IOSCO members approach the regulation and oversight of crypto- investment activities, given the cross-border nature of the markets, the dangers of regulatory arbitrage and the whole lot of danger of harm to which retail investors continue to be exposed.”
In addition of that, it seeks to foster “optimal consistency in the way crypto- investment markets and securities markets are regulated within individual IOSCO jurisdictions, in accordance with the principle of ‘same activities, same dangers, same regulatory outcomes.’”
According to Lim Tuang Lee, the chair of the IOSCO Board-Level Fintech Task Force that is working on developing the policy recommendations, cryptocurrency service providers must 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.”
What does industry think
In his comments shared with Finbold on May 23, Mikkel Morch, Chairman and Non-Executive Director at digital a fund of financing ARK36, said:
“ Although while the proposed standards hold the promise of enhancing investor protection, it is crucial to strike the right balance betwixt regulation and innovation to foster continued growth and development in this dynamic industry.”
Simultaneously, Bradley Duke, co-CEO at European cryptocurrency financing product company ETC Group, hailed them as “ definitely a step in the right direction,” adding that his company welcomes “any well-considered regulation or digital assets guidance that increases investor protections as this helps to attract confidence and stability to this nascent sector.”
In the meantime, cryptocurrency corporations in the United States are struggling with the lack of regulatory clarity that has led to the legal battle betwixt the United States Securities and Exchange Commission (SEC) and Ripple, in which the agency is accusing the blockchain tech company of breaking the law by selling the XRP Ripple (XRP) crypto token, which it considers a security.