IOSCO Sets Global Crypto Policy Expectations in Final Report

• IOSCO has published its final report on crypto regulation.
• The policymaker outlined various recommendations.
• The next steps involve ensuring the adoption and implementation of the report.

In a move addressing key areas of harm observed in the cryptocurrency industry, the International Organization of Securities Commissions (IOSCO) unveiled its report on policy recommendations for crypto and digital asset markets on November 16.

The report reflects IOSCO’s May consultation paper, which laid out various recommendations to address market integrity and investor protection concerns arising from crypto asset activities. Notably, the consultation report vouched for oversight consistency among IOSCO’s member states to mitigate the risk of “regulatory arbitrage.”

Final Report on Crypto Regulatory Framework Proposes

In its final report , IOSCO issued 18 recommendations covering six key areas to support its member states in creating compliant markets for crypto asset activities “in the most effective way possible.”

Notably, the recommendations seek to address various risks posed by crypto asset service providers (CASPs), including conflicts of interest arising from the vertical integration of activities and functions, market manipulation, insider trading, and fraud.

The policy body further issued recommendations on custody and client asset protection, cross-border risks and regulatory cooperation, operational and technological risk, and retail distribution.

While the report isn’t directly addressed to market participants, the outlined recommendations cover a range of activities that involve CASPs, including offering, admission to trading, ongoing trading, settlement, market surveillance, and custody.

Next Steps

In a follow-up press release , IOSCO Chair Jean-Paul Servais lauded the report as the “first and important step” to ensure investor protection, as well as a fair, efficient, and transparent global crypto market.

Servais noted that IOSCO’s next step is to fast-track the adoption and implementation of the issued recommendations to support optimal consistency and ensure crypto activities are regulated across its member jurisdictions.

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