IOSCO proposes global standard for crypto regulation

23 May 2023

Image: © Andrey Popov/

The recommendations aim to improve crypto regulation worldwide, following the collapse of FTX last year.

A global securities watchdog has shared a new framework to guide jurisdictions in regulating the cryptocurrency sector.

The International Organization of Securities Commissions (IOSCO) said these recommendations aim to enhance investor protection and maintain fair, transparent crypto markets.

The proposed rules cover six key areas, including market manipulation, cross-border regulatory cooperation and client asset protection.

The IOSCO said this “major initiative” aims to improve the global standard of crypto regulation by listing how clients should be protected and how crypto trading should “meet the standards that apply in public markets”.

IOSCO chair Jean-Paul Servais said the organisation is “best positioned” to deliver these recommendations as it has 130 members around the world regulating “more than 95pc of the world’s securities markets”.

“Strengthened cooperation between our members while supervising these markets through a global framework will contribute to protecting investors better and to credible deterrence of non-compliant actors,” Servais said.

The IOSCO has opened a public consultation on its recommendations and aims to finalise them by the end of the year. Comments can be sent to the organisation on or before 31 July.

Preventing another FTX

The framework comes after the controversial collapse of crypto exchange FTX last year, which caused a sudden plummet in crypto assets, fraud allegations and billions of dollars in missing customer assets.

The collapse had a knock-on effect for the broader crypto industry, contributing to the collapse of Silvergate Bank earlier this year.

Tuang Lee Lim, chair of the IOSCO fintech task force, said crypto-asset service providers need to address “unacceptable conflicts of interest” and “take far more seriously” the right of clients to have their assets accounted for.

“It is time for regulators to work together across borders and various jurisdictions to ensure that investor protection and market integrity are upheld in crypto-asset markets,” he said.

Players within the crypto sector have been calling for clearer regulation, such as Coinbase in the US. The crypto exchange took legal action against the US Securities and Exchange Commission, in a bid to get clearer regulations for the digital asset securities market.

The EU, meanwhile, made a significant step last week in its efforts to govern and safeguard the crypto industry. The EU Parliament voted overwhelmingly in favour of the Markets in Crypto Assets (MiCA) legislation, which creates a set of common rules around the supervision of crypto assets and cryptocurrencies.

The MiCA legislation also creates new rules on consumer protection, market manipulation, financial crime and environmental safeguards

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Leigh Mc Gowran is a journalist with Silicon Republic