- The lack of comprehensive crypto rules has been the market’s biggest undoing as platforms exploit the numerous loopholes.
- IOSCO has developed the first global approach to regulating the crypto market, including affiliate businesses.
- IOSCO plans to finalise the standard by the end of the year and respect its 130 members to implement it.
After the FTX cash, the global crypto market is under siege by crypto regulators from all countries. The lack of comprehensive crypto rules has been the market’s biggest undoing as platforms exploit the numerous loopholes. For some time now, many have thought that crypto hackers merely took advantage of blockchain’s new state to discover minor vulnerabilities.
However, it soon became apparent that scammers and fraudulent activities present a big problem for the industry. Crypto fraud has plagued trades since the One Coin scandal, and now the FTX has reaffirmed such fears. As a result, crypto regulators turned towards the market, looking for any hint of illegalities. Fortunately, the International Securities Watchdog, IOSCO, has presented the first global approach to regulating crypto assets and digital markets.
This new framework will spare crypto exchanges and platforms from the constant bombardments from other regulators.
International securities watchdog comments on the FTX Crash
Many within the global crypto market have marked 2022 as one of the worst years since the first Bitcoin transaction. The year was filled with numerous crypto hacks and scams that resulted in losing at least $3.8 billion. Throughout the year, many crypto exchanges suffered the intense pressure of entering and safeguarding their crypto assets from potential;l hackers. Unfortunately, what almost brought down the franchise was none other than the FTX crash.
This scenario was unique because the FTX was a titan within the global crypto market, both in fame and age. Sam Bankman founded FTX in 2019 after the golden age of Bitcoin two years prior. Its sophisticated features and ability to unit both the crypto and forex trading significant people its user rate.
It rivalled crypto exchanges such as Binance and Coinbase, claiming the title of the third-largest crypto exchange for some tie. Its sudden crash created a void that threatened the entire ecosystem, and many marked it as the most significant crypto fraud.Its animate fall sent a ripple effect worldwide, casting all crypto regulators. It became clear that clear and more defined crypto laws were necessary to prevent such a session from occurring again. International Securities Watchdog IOSCO had plenty to state concerning other crypt regulators and the entire market.
IOSCO chair Jean-Paul Servais said, “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 it’s still not a material issue and risk.”
The international security watchdog is responsible for setting several crypto laws for regulating stablecoins. They further claimed that more well-defined regulations were needed. They stated that the global crypto market is steadily interconnecting with different industries.
This is a problem since set crypto regulations are only forces n the global crypto market as a single entity and fail to account for its application in other industries.
Thus warmed, with this line of thought, IOSCO set out to develop a global crypto regulation encompassing every aspect.
International securities watchdog develops international crypto laws.
IOSCO has developed the first global approach to regulating the crypto market, including affiliate businesses. Since the FTX crash, the international security watchdog has changed their objectives from anti-money laundering checks to establishing crypto regulations.
Jean presented a turning point on the 22nd of May for all crypto regulators. According to IOSCO, the proposed standard will deal with several issues plaguing the global crypto market. They include; conflicts of interest, market manipulation, cross-border regulatory cooperation, custody of crypto assets, operational risks, and treatment of retail customers.
Matthew Long, director of digital assets at Britain’s Financial Conduct Authority, contributed significantly to its direct relation. He ascertained that with the global evolution placing the pug on the global crypto market is a waste of time. Instead, crypto regulators should focus more on making crypto safe for the market.
The framework contains 18 measures planned that, when applied, establish long-lasting safeguards that can integrate crypto transactions within mainstream markets.
IOSCO has stated that it intends to limit crypto fraud by ensuring it cannot exploit loopholes within existing laws. It plans to finalise the standard by the end of the year and respect its 130 members to implement it. Doing so will plug gaps and give crypto regulators a more sophisticated framework that deals with crypto hacks, fraud and scams.
The International Securities Watchdog has stepped forward to utility change the global crypto market. Within the past few months, crypto regulators have consistently targeted crypto exchanges that pose potential harm as the FTX exchange. As a result, numerous crypto exchanges have shut down due to heavy fines.
Crypto exchanges such as Binance, Bitrue, Karaken, and others have suffered under the harsh thumb of many crypto regulators. They pose a more significant threat to the global crypto market if they were to indulge in crypto fraud. However, setting defined crypto laws will have long-lasting effects compared to cracking down on existing exchanges.
Also, Read Crypto Investment in Africa.
It’s like giving fish to people experiencing poverty than teaching them to fish. The International Securities Watchdog has made itself apparent in its attempt to solve the market by establishing a global approach to crypto laws.