The crypto industry has its first set of global rules proposed by Watchdog

According to Reuters, the International securities watchdog IOSCO has introduced a groundbreaking global framework for regulating crypto assets and digital markets, taking into account the lessons learned from the FTX exchange collapse last year.

In response to FTX's liquidity crisis and subsequent U.S. bankruptcy proceedings, there has been a growing emphasis on customer protection within the industry. While the sector has traditionally focused on complying with anti-money laundering checks, there has been a widespread call for a unified regulatory approach to address the differing rules and regulations across jurisdictions.

Regulators from around the world recognized the need for rules governing crypto “conglomerates” like FTX, which engage in multiple activities without sufficient safeguards for customer assets, thus leading to conflicts of interest.

The recent unveiling of IOSCO's plans marks a pivotal moment in managing the risks associated with cryptoassets, such as bitcoin and ether. Jean-Paul Servais, Chair of IOSCO, stated that the crypto business has expanded on an imperfect foundation and requires correction.

Matthew Long, Director of Digital Assets at the Financial Conduct Authority in Britain, emphasized the importance of ensuring the safety of the crypto market, particularly in light of recent global events.

Haydn Jones, Global Lead of Blockchain and Crypto Solutions at Kroll, praised frameworks like IOSCO's for their ability to prevent criminal activity and promote the widespread benefits of underlying crypto technology.

The proposed 18 measures aim to incorporate established safeguards from traditional financial markets, addressing conflicts of interest that may arise during various stages of a crypto transaction. IOSCO intends to finalize these standards by the end of the year and expects its 130 members worldwide to adopt them, filling gaps in their respective regulatory frameworks and harmonizing the industry.

IOSCO, composed of regulatory bodies such as the U.S. Securities and Exchange Commission, Japan's Financial Services Agency, Britain's Financial Conduct Authority, and Germany's BaFin, is seeking public input on the regulations.

This development follows the European Union's recent completion of the world's first comprehensive set of rules, placing pressure on other countries, including the United States and the United Kingdom, to establish their own regulatory norms.