Regulator Group Proposes First Global Crypto Rules

A worldwide organisation of securities regulators has put forward guidelines for its members that represent the first coordinated effort to establish rules for the cryptocurrency industry.

In publishing the guidelines on Tuesday Iosco said regulators should consider breaking up crypto organisations with unmanageable conflicts of interest, while also focusing on areas such as disclosure and governance.

The 18-point plan takes urgency from the collapse of a number of high-profile crypto firms last year, notably major exchange FTX.

Iosco said it wanted member countries to push the guidelines into legislation as quickly as possible – while acknowledging that it would take years for the recommendations to be implemented in full.

Global approach

The organisation said its 130 member countries agreed on the direction in which they should all be going, and that it was merely a question of pushing ahead.

The recommendations are a “turning point in addressing the very clear and proximate risks to investor protection and market integrity risks” in the crypto industry, said International Organization of Securities Commissions (Iosco) chair Jean-Paul Servais.

Servais noted that crypto firms often offer services such as broking, trading, custody and market-making that in mainstream finance are separated from one another.

The proposed standards include conflicts of interest, market manipulation, cross-border regulatory coordination, custody of cryptoassets, operational risks and treatment of retail customers, applying established concepts from mainstream markets.

Implementation

Iosco said it expected to finalise the standards by the end of the year.

The organisation, which includes regulators such as the UK’s Financial Conduct Authority, the US Securities and Exchange Commission, Japan’s Financial Services Agency and regulators from EU member states such as Germany’s BaFin, is currently taking public comment on the proposed rules.

The EU earlier this month finalised the world’s first set of comprehensive crypto rules, putting pressure on jurisdictions such as the UK and the US to implement concrete actions.