Determining the best way to regulate the cryptocurrency industry has been a goal of multiple jurisdictions around the world. Now, the International Organization of Securities Commissions (IOSCO) has published a recent consultation paper on the matter, which was published on May 28th. The IOSCO is a standard setter for global securities regulations.
In the news release for this paper, the organization clarifies that they regulate about 95% of the securities markets around the world, while impacts 115 jurisdictions. Within the IOSCO, the organization works towards adherence to a mutual and consistent standard, determining the regulations and how they are enforced in the global securities sector.
The consultation paper is called “Issues, Risks, and Regulatory Considerations Relating to Crypto-Asset Trading Platforms.”
The paper requests feedback from the public that will help the organization understand the risks and other concerns associated with the cryptocurrency industry, as identified by IOSCO. The public will need to submit all of their comments by July 29th this year.
In the report, the company outlines certain considerations, which includes:
- Access to CTPs
- Protecting assets
- Conflicts of interest
- CTP operation
- Market integrity
- Price integrity
This innovative approach follows a G20 2018 communique that was already presented to the various entities that set the standards for regulations. The communique discussed the continuance of regulating cryptocurrencies and addressing their risks, “according to their respective mandates, and asset multilateral responses as needed.”
In some cases, the new release states that the cryptocurrency assets will end up covered by the traditional framework of the securities laws already in place. However, that circumstance will only be implemented if the local regulatory authority in that area has determined that the crypto asset is considered a security that would already be covered by the phrasing in their securities laws.
The fact that CTPs could be regulated brings up another potential issue for the authorities, according to IOSCO. For that reason, the paper states that it may be helpful to use their detailed analysis of considerations as a baseline for regulators, as they determine their revised approach.
The IOSCO established the Initial Coin Offering Consultation Network in January 2018, as a way to learn about the experiences of the ICO market. Some of the issues addressed in the annual conference that year revolved around the challenges associated with this budding asset class. As such, the challenges impacted the approaches that securities regulators worldwide took on in their governance of the industry.