Global regulators to target crypto platforms after FTX crash By Reuters
Stock Markets 7 minutes ago (Nov 24, 2022 01:10AM ET)
(C) Reuters. FILE PHOTO: Representations of cryptocurrencies are seen in front of displayed FTX logo in this illustration taken November 10, 2022. REUTERS/Dado Ruvic/Illustration
By Huw Jones
LONDON (Reuters) – The crash of FTX exchange has injected greater urgency into regulating the crypto sector and targeting such ‘conglomerate’ platforms will be the focus for 2023, the new chair of global securities watchdog IOSCO said in an interview.
Jean-Paul Servais said regulating crypto platforms could draw on principles from other sectors which handle conflicts of interest, such as at credit rating agencies and compilers of market benchmarks, without having to start from scratch.
Cryptoassets like bitcoin have been around for years but regulators have resisted jumping in to write new rules.
But the implosion at FTX, which left an estimated one million creditors facing losses totalling billions of dollars, will help change that, Servais told Reuters.
“The sense of urgency was not the same even two or three years ago. There are some dissenting opinions about whether crypto is a real issue at the international level because some people think that it’s still not a material issue and risk,” Servais said.
“Things are changing and due to the interconnectivity between different types of businesses, I think it’s now important that we are able to start a discussion and that’s where we are going.”
IOSCO, which coordinates rules for G20 countries and others, has already set out principles for regulating stablecoins, but now the focus is turning to platforms which trade in them.
In mainstream finance there is functional separation between activities like broking, trading, banking services and issuance, with each having its own set of conduct rules and safeguards.
“Is it the case for the crypto market? I would say most of the time not,” Servais said.
Crypto ‘conglomerates’ like FTX have emerged, performing perform multiple roles such as brokerage services, custody, proprietary trading, issuance of tokens all under a single roof that give rise to conflicts of interest, Servais said.
“For investor protection reasons, there is a need to provide additional clarity to these crypto markets markets through targeted guidance in applying IOSCO’s principles to crypto assets,” Servais said.
“We intend to publish consultations report on these matters in the first half of 2023,” he added.
Madrid-based IOSCO, or International Organization of Securities Commissions, is an umbrella body for market watchdogs like the Securities and Exchange Commission in the United States, Bafin in Germany, Japan’s Financial Services Agency, and the UK Financial Conduct Authority, who all commit to applying the body’s recommendations.
The European Union’s new markets in cryptoassets or MiCA framework is an “interesting starting point” for developing global guidance as it focuses on supervision of crypto operators, said Servais, who also chairs Belgium’s financial regulator FSMA.
“I think that the world is changing. We know there is some space for developing new standards about supervision of this kind of crypto conglomerates. There is an obvious necessity,” Servais said.
Global regulators to target crypto platforms after FTX crash
By Yimou Lee and Brenda Goh TAIPEI/SHANGHAI (Reuters) – Apple’s major supplier Foxconn said on Thursday a “technical error” occurred when hiring new recruits at a COVID-hit iPhone…
BOGOTA (Reuters) – Colombian airlines Avianca and Viva have appealed to the aviation regulator after it denied their plan to merge, proposing steps to allay its concerns, such as…
SINGAPORE (Reuters) – Billionaire investor Bill Ackman said he’s betting the Hong Kong dollar will fall and that its peg to the U.S. dollar can break, the latest big money manager…
(C) 2007-2022 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.