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Crypto Regulation: Global watchdog IOSCO introduces framework

In light of the failure of the FTX exchange the previous year, the International Organisation of Securities Commissions (IOSCO) has developed a revolutionary worldwide framework for the regulation of crypto assets and digital markets. This framework takes into consideration the lessons that were learned from the FTX exchange failure. According to Reuters, this action resolves concerns surrounding consumer protection in the business, which previously was required to solely conform to anti-money laundering inspections and faced varied legislation between nations.

A significant cryptocurrency exchange, FTX, filed for bankruptcy in November of the preceding year, which served as a catalyst for the intervention of regulatory authorities all over the globe. These authorities stressed the need for establishing laws for crypto “conglomerates” like FTX, which combine numerous businesses without providing adequate protections for consumer funds, which may lead to possible conflicts of interest.

The latest suggested guidelines constitute a key turning point in minimising risks linked with crypto assets like bitcoin and ether, according to Jean-Paul Servais, the Chairman of IOSCO. Servais stressed how important it is to fix the defective basis on which the crypto sector has been permitted to grow to its current size.

Managing conflicts of interest, avoiding market manipulation, allowing cross-border regulatory cooperation, ensuring secure custody of crypto assets, addressing operational risks, and protecting the interests of retail consumers are just some of the important topics that the proposed standards cover.

In light of recent global events, Matthew Long, Director of Digital Assets at the Financial Conduct Authority in Britain, stressed the significance of the proposed laws by noting that they want to guarantee the safety of cryptocurrencies in the market. He emphasised the relevance of the proposed regulations by stating that they aim to ensure the safety of cryptocurrencies.

Haydn Jones, Global Lead of Blockchain and Crypto Solutions at Kroll, emphasised the necessity of frameworks such as IOSCO’s in preventing illegal activities and allowing wider advantages from the underlying technology of cryptocurrencies. Jones was speaking on the importance of cryptocurrencies and blockchain technology.

The 18 separate measures that are defined in the plan depend on well-established precautions in conventional financial markets. These safeguards attempt to avoid conflicts of interest between various components of cryptocurrency transactions, and the measures that are stated in the proposal are based on these safeguards.

The International Organisation of Securities Commissions (IOSCO) plans to conclude these standards by the end of the year and anticipates that its 130 members throughout the globe, which include regulatory agencies such as the United States Securities and Exchange Commission, Japan’s Financial Services Agency, Britain’s Financial Conduct Authority, and Germany’s BaFin, will accept them. IOSCO’s goal is to finalise these standards by the end of the year. This strategy has as its goal the worldwide harmonisation of rules, the elimination of fragmented monitoring, and the prevention of businesses from taking advantage of regulatory discrepancies.

Following in the footsteps of the European Union, which recently completed the world’s first comprehensive set of laws for cryptocurrency, the International Organisation of Securities Commissions (IOSCO) is presently soliciting public comments on these regulations. Because of this new trend, nations such as the United Kingdom and the United States are under increased pressure to formulate their own standards.

As a further demonstration of its dedication to tackling the ever-changing environment of the cryptocurrency business, the International Organisation of Securities Commissions (IOSCO) aims to provide proposals for the regulation of decentralised finance in the coming months.

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