IOSCO Attempts to Create Global Rules for Crypto Trading Platforms

Wilfred Michael 

Wilfred Michael

News reporter

31 May 2019,
17:49
IOSCO Attempts to Create Global Rules for Crypto Trading Platforms

The International Organization of Securities Commissions (IOSCO) has become the latest global agency to seek uniform regulation for cryptocurrency industry participants.

Earlier this week, the regulatory agency which purportedly oversees the activity of 95% of the world’s securities markets released a consultation paper detailing key considerations for regulating Crypto-Asset Trading platforms (CTPs).

Members of the public would have until July 29, 2019, to make contributions to the considerations before the organization releases perhaps an updated copy of the guidance.

IOSCO CTP Guidance Overview

The consultation paper by the IOSCO defines a Crypto-Asset Trading Platform as a facility or system that brings together multiple buyers and sellers of crypto-assets to complete transactions or trades. In some cases, though, these venues could perform the role of intermediaries, custodians, transfer agents, and clearing houses.

Next, the IOSCO set out seven primary considerations that regulatory authorities have to consider when creating laws for these platforms, namely — access to CTPs, safeguarding participant assets, conflicts of interest, operations of CTPs, market integrity, price discovery, and technology.

Among other recommendations made by the IOSCO, a highlight of the proposed rules is that if a regulator determines that a cryptocurrency functions as a security, then the agency can decide to apply existing securities law to the company that intends to issue the cryptocurrency.

The IOSCO also noted that there would be cases where the matter of regulating cryptocurrency trading platforms will present unique challenges to regulatory bodies. For such a situation, the paper recommends that the organization could use its stated guidelines to create a solution.

Interestingly, the IOSCO guidelines arrived just a few days before the Financial Stability Board (FSB) recommended that G20 member nations proactively monitor the growth of crypto-assets. A uniformed regulation at such a high level no doubts benefit both the crypto industry and regulators.

 

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