IOSCO Finalizes Policy Recommendations for the Crypto and Digital Asset Markets

IOSCO, the International Organization of Securities Commissions, today published its Final Report with Policy Recommendations for Crypto and Digital Asset (CDA) Markets. These recommendations are the first and most important step in ensuring that investors are protected and that crypto-asset markets operate fairly, efficiently, and transparently.

CASPs Must Prioritize Retail Investor Protection in Cryptoasset Distribution

Under the category of retail distribution, CASPs should prioritize the protection of retail investors when distributing cryptoassets. This involves implementing measures to ensure that retail investors fully understand the risks associated with investing in crypto assets and are provided with clear and accurate information about the products being offered.

CASPs should also have appropriate procedures in place to prevent the sale of cryptoassets to retail investors who may not be suitable for such investments, based on their investment objectives, financial situation, and knowledge and experience in investing in cryptoassets.

Additionally, CASPs should have effective communication channels with retail investors to address any concerns or issues that may arise during the distribution process. Overall, the protection of retail investors is a critical aspect of CASPs’ operations, and it is essential that they prioritize this area to ensure that investors are treated fairly and have a clear understanding of the risks involved in investing in cryptoassets.

“The publication of the IOSCO Report on Crypto and Digital Asset Markets is a major step forward in our efforts to protect investors and ensure that crypto-asset markets operate with integrity. These recommendations will provide a clear and consistent regulatory framework for CASPs around the world.”

IOSCO Chair Jean-Paul Servais

The recommendations are outcomes-focused and based on the principle of “same activity, same risk, same regulatory outcome.” They are designed to ensure that CASPs meet the same standards of business conduct that apply in traditional financial markets.

“The activities of CASPs and their associated risks frequently mirror those observed in traditional financial markets. The regulatory approach taken in the IOSCO Report is therefore consistent with IOSCO’s Principles and associated standards for securities market regulation.”

Tuang Lee Lim

The report follows previous publications by IOSCO on DeFi, stablecoins, and influencers and recommends that national regulators acquire supervisory capacities such as reporting channels for misleading promotions and evidence-tracking processes for online information.

Overall, the report establishes a global regulatory foundation for CASPs, aligning with IOSCO’s principles for securities regulation and supporting standards, recommendations, and best practices.

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