LONDON, Nov 24 – The bankruptcy of the “crypto platform” FTX has given greater urgency to the regulation of the cryptocurrency sector, and the aim of the platforms of this type of “conglomerate” will be the focus of attention in 2023, as stated in an interview by the new president of the International Organization of Securities Commissions (IOSCO).
Jean-Paul Servais stated that the regulation of cryptocurrency platforms could be based on the principles of other sectors that manage conflicts of interest, such as credit rating agencies and market reference compilers, without having to start from scratch.
Cryptocurrencies like Bitcoin have been around for years, but regulators have resisted making new rules.
But the implosion of FTX, which has left a million creditors facing losses totaling billions of dollars, will help change that, Servais told Reuters.
“The sense of urgency was not the same even two or three years ago. There are some differing opinions about whether cryptocurrencies are a real problem internationally, because some think that it is still not a problem and a major risk,” Servais said. .
“Things are changing and because of the interconnectedness between different types of businesses, I think it’s now important that we are able to start a discussion and that’s where we’re heading.”
The IOSCO, which coordinates the rules for the G20 countries and others, has already established the principles to regulate “stablecoins” or stable cryptocurrencies, but now the focus is on the platforms that trade with them.
In conventional finance there is a functional separation between activities such as brokerage, trading, banking and issuance, with each having its own set of rules of conduct and safeguards.
Cryptocurrency “conglomerates” such as FTX have sprung up, performing multiple functions such as brokerage, custody, proprietary trading and token issuance services all under one roof, leading to conflicts of interest, Servais said.
The European Union’s new regulatory framework for markets in crypto assets, or MiCA, is an “interesting starting point” for developing global guidance as it focuses on the supervision of crypto asset operators, said Servais, who also chairs the regulator. Belgian financial FSMA.