The International Securities Organization (IOSCO) released a 68-page document this Tuesday (23) with recommendations on the cryptocurrency market.
Divided into 10 chapters, the text addresses the market’s main issues. As a good example, he cites the case of FTX where customer money ended up in Alameda Research accounts, both managed by the same group of people.
In another chapter, cooperation between supervisors from different countries is recommended. The tenth and final addresses stablecoin issues.
IOSCO lists the main problems of the cryptocurrency market
Speaking to the Financial Times, also published on Tuesday (23), Martin Moloney, Secretary General of IOSCO, commented on some of the key points of the current problems they are trying to solve.
“I am not aware of any major players in the cryptocurrency market, as far as you can tell they trade from, that do not trade from a member jurisdiction. So we have the global reach to make these recommendations work.”
One of the issues mentioned in the paper is conglomerates. That is, sets of companies linked by a parent company, which can increase investors’ risks in these markets.
The best example of this case is FTX, which used its clients’ money to fund the adventures of Alameda Research. But this is not as uncommon as you might think.
For example, Tether and Bitfinex, both controlled by iFinex, also exchanged an amount of US$ 850 million between themselves to cover financial shortfalls. Thankfully, this story didn’t end in disaster, but it’s disturbing nonetheless.
The Digital Currency Group (DCG), another industry giant, also saw its affiliates, mainly Grayscale, tremble following the bankruptcy of Genesis.
However, this is just one of many points being addressed by IOSCO, which also recommends action against trading intermediaries, cryptocurrency listings, abuse, client funds splitting, and stablecoins.
IOSCO calls for agility and cooperation between regulators
With no major challenges to switching jurisdictions, many companies in the cryptocurrency sector today look for places where the laws are more favorable to them, and work with intermediaries to reach overseas.
However, IOSCO is concerned about the lack of global regulations that can close such loopholes. In chapter 6, the text calls for global cooperation to limit money laundering risks, for example.
“What we would say to jurisdictions is just move forward”IOSCO Secretary General told the Financial Times. “They all have different legal structures, different regulatory structures. Just move forward, do it as quickly as possible by that standard… There is no point in holding back on this point for anyone.”
Finally, it is still too early to think about the impact of global regulation on the cryptocurrency sector. Slightly higher on Tuesday (23), the market doesn’t appear to have taken the IOSCO action as an imminent threat, but that’s not to say everyone will like it.
Source: Live Coins

Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.