Following FTX crash, new regulations coming to crypto platforms – Technology Org

stockgeist
stockgeist

After an unexpected and lightning-fast FTX crash, experts forecast new cryptocurrency trading regulations will be the main focus for 2023.

Bitcoin cryptocurrency - artistic interpretation.

Bitcoin cryptocurrency – artistic interpretation. Image credit: Mohamed Hassan via Pxhere, CC0 Public Domain

The International Organization of Securities Commissions (IOSCO) says new regulations for crypto-trading platforms are needed to handle market benchmarks, conflicts of interest, and credit rating procedures if the industry doesn’t want to restart building this market from scratch.

Until now, implementations of necessary regulations in the area of ​​crypto assets were happening very slowly. However, the record-fast demise of FTX that led to losses amounting to billions of dollars clearly shows that change is needed urgently.

“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,” said Jean-Paul Servais, the vice chair of the IOSCO Board.

Servais also emphasizes that the mainstream finance mechanisms have a structured approach toward risk management – the main areas of activities such as broking, trading, or banking are functionally separate and have separate rules and safety limits. This is not the case in the crypto market, yet. Therefore, it is time to develop new supervision standards for cryptocurrency companies.

IOSCO unifies several key market watchdogs including the Securities and Exchange Commission in the United States, Bafin in Germany, Financial Services Agency in Japan, and the UK Financial Conduct Authority. All of these institutions are committed to implementing IOSCO’s recommendations in practice.

The European Union’s new markets in crypto assets or MiCA framework is an “interesting starting point” for developing global guidance as it focuses on the supervision of crypto operators, said Servais, who also chairs Belgium’s financial regulator FSMA.


Leave a Reply

Your email address will not be published. Required fields are marked *