(CTN News) – The collapse of the FTX exchange has increased the pressure for regulating the cryptocurrency industry, and the new head of the international securities watchdog IOSCO said in an interview that the emphasis for 2023 would be on such “conglomerate” platforms.
According to Jean-Paul Servais, regulating crypto platforms might borrow ideas from other industries that deal with conflicts of interest, such as credit rating companies and those that create market benchmarks, rather than needing to start from scratch.
Although cryptocurrencies like bitcoin have been around for a while, officials have held off on creating new regulations.
The fall of the FTX exchange has sped up crypto regulation, and 2023 will concentrate on ‘conglomerate’ platforms.
However, Servais told Reuters that the collapse at FTX, which left an estimated one million creditors with losses of billions of euros, will help alter that.
“Even two or three years ago, the urgency was different. Because some individuals believe that cryptocurrency is still not a significant concern and problem at the global level, there are some divergent views on the matter, “explained Servais.
“Things are changing, and since various sorts of companies are becoming more interconnected, I believe it’s now crucial that we can start a dialogue, and that’s where we are headed,” the speaker said.
Although the fundamentals for regulating stablecoins have already been established by IOSCO, which coordinates regulations for the G20 and other nations, attention is now shifting to the platforms that trade in them.
In conventional finance, different operations such as broking, trading, banking services, and issuance are functionally distinct from one another and each has its own standards of behaviour.
“Is this true for the cryptocurrency market? Most of the time, I’d say no, “said Servais.
With several functions, including brokerage services, custody, proprietary trading, and the issue of tokens all performed under one roof by crypto “conglomerates” like FTX, conflicts of interest might arise, according to Servais.
“There is a need to offer extra clarity to these crypto markets marketplaces by focused advice in applying IOSCO’s rules to crypto assets,” Servais added. This is necessary for investor safety.
He said, “We want to produce a report on discussions on these issues in the first half of 2023.”
The Securities and Exchange Commission in the United States, Bafin in Germany, the Financial Services Agency of Japan, and the Financial Conduct Authority of the United Kingdom are just a few examples of market regulators that are members of the Madrid-based IOSCO, or International Organization of Securities Commissions, and have agreed to implement its recommendations.
According to Servais, who also serves as the chair of Belgium’s financial regulator FSMA, the European Union’s new markets in crypto assets, or MiCA framework, is an “interesting starting point” for creating international guidance because it places a strong emphasis on the supervision of crypto operators.
“The world, in my opinion, is changing. We are aware that there is room to create new guidelines for overseeing these crypto conglomerates. There is a clear need, “explained Servais.
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