Global securities organization proposes framework for regulating cryptocurrency.

The International Organization of Securities Commissions (IOSCO) has developed new guidelines to provide a balanced regulatory environment and investor protection for cryptocurrencies. IOSCO’s 18 recommendations include cross-border regulatory cooperation, custody of crypto assets, treatment of retail customers, conflicts of interest, and market manipulation. The standards aim to mitigate the immediate risks to investors and market integrity and come in the wake of the FTX exchange bankruptcy in Q4 2022. Since then, other firms have closed following regulatory action or a liquidity crisis, leading to calls for a unified regulatory matrix. IOSCO Chair Jean-Paul Servais has stressed that these newly proposed recommendations will serve as a critical turning point. The board expects its 130 member countries to integrate these regulations promptly into their respective rulebooks by the end of the year. 
The European Union has also approved the Market in Crypto-Assets legislation, which will take effect by mid-2024. Many believe it will put greater pressure on other countries, such as the US Congress, to create regulatory frameworks. Regulatory uncertainty in the US could be causing large trading businesses to scale back participation, putting the nation’s ability to innovate at risk, according to an analyst at ARK Invest.