Bitcoin rises as first global approach to regulating crypto assets put forward
· The International Organization of Securities Commissions which regulate financial markets unveils 18-point plan to put guardrails around crypto investing.
· Bitcoin rises as proposals propel crypto currencies further into the mainstream.
· Concerns about investors’ risk following the FTX collapse prompted the move.
· The move piles pressure on UK to publish its own crypto market regulation.
Susannah Streeter, head of money and markets, Hargreaves Lansdown:
‘’This move by the international watchdog which represents authorities regulating financial markets around the world, is aimed at protecting investors but it will also propel crypto further into the mainstream. Bitcoin seems to have been bolstered by the news of this concerted effort to regulate the industry, rising by more than 2%. The crypto currency has gained 64% since the start of the year, largely recovering from the sharp falls it suffered in the back half of 2022. Despite this volatility, the IOSOC is clearly recognising that digital coins and tokens are here to stay which is why it’s pushing a global approach to governing this risky asset class.
When FTX collapsed like a house of cards it sent shockwaves – not just through the crypto world – but also the wider financial system as the vast numbers of diverse firms owed money became apparent. The ripple effect sent a shiver through regulatory bodies and prompted this turning point from the IOSOC. It wants to apply the similar stringent rules governing the way equity and bond markets operate to the crypto-sphere covering requirements governing conflicts of interest, operational risks, treatment of market manipulation and the treatment of retail customers. This move by the international watchdog comes hot on the heels of MPs calling for the government to treat crypto investments as gambling. The need for regulation could not be clearer, and now the guardrails have been drawn up and now the pressure is growing on individual jurisdictions, including the UK, to come up with a concrete plan to regulate the market.