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Regulators should be faster and bolder to tame crypto markets and break up companies with unmanageable conflicts of interest, as they unveil a blueprint to rein in the financial “West” The world securities watchdog said.
Iosco, an umbrella group of global market regulators, on Tuesday released guidelines for regulators to tighten standards following a series of industry explosions, including crypto exchange FTX. The 18-point plan covers areas such as conflicts of interest, disclosure rules and governance.
“The diversity we see across jurisdictions at the moment is not that they are moving in different directions, but rather that we are moving far enough in the direction we all know we should be moving,” said Iosco Secretary-General Martin. That means there aren't any.” Moloney told the Financial Times.
“All we want to say to the jurisdictions is just move forward. They all have different legal frameworks, different regulatory frameworks. Please move forward with this standard as soon as possible. . . . at this point. Holding back doesn’t help anyone.”
FTX's collapse and its close ties to related trading group Alameda Research have given regulators new impetus to tighten or create standards. Companies such as Binance, the world's largest exchange, have previously clashed with global regulators over money laundering policies and consumer protection concerns. The company has also faced criticism over the transparency of its corporate structure.
The EU finalized a comprehensive package of crypto regulations last week, but the UK is in the early stages of developing its own rules and has promised to be “more agile” than Europe.
Jean-Paul Servais, chairman of Moloney & Iosco and chairman of the Belgian securities regulator, said that many crypto companies offer services such as intermediation, trading, custody and market making. It pointed out. In traditional financial companies, these activities are separated from each other.
The proposal asks regulators to consider whether some conflicts of interest are “so severe that they cannot be effectively mitigated.” In that case, “stronger measures, such as legal unbundling or separate registration and regulation of certain activities,” may be needed.
“This is new,” Moloney said. “So this is a very strong challenge. . . . Iosco, on its part, is calling on the global regulatory community to actually address business issues that are built on conflicts of interest.”
Although Iosco does not have the power to force regulators to adopt the rules, Mr Moloney said the proposal would be implemented by Iosco's member states, which span 130 countries and cover 95% of the world's financial markets. I'm confident,” he said.
“Frankly, we generally don't have a problem with members who don't follow our recommendations,” Moloney said. “It is not sustainable for members to continue not following our recommendations, but I am confident that this will not happen.”
“I am not aware of any significant players in the crypto market that are not trading from member state jurisdictions, as far as we can tell where they are trading from. Therefore, we believe that in order to make these recommendations work, ,” he added.
Servais said countries should act “as soon as possible”, with the G7 reiterating its support for introducing an “effective regulatory and supervisory framework” for cryptoassets and stablecoins on May 13. He pointed out that.
Mr Moloney added that it would take “even the major jurisdictions many years” to fully adopt the “very tough recommendations”, which also include proposals on fair trading, disclosure and corporate governance. .
“For the time being, investors need to continue to be very careful about crypto asset service providers telling them it’s okay because they’re regulated,” Moloney said.
The Financial Stability Board, a group of global financial policy makers, will issue recommendations to reduce financial stability risks from cryptocurrencies in July.
