LONDON (Reuters) – The resounding bankruptcy of crypto-asset exchange FTX makes regulation of this sector more urgent and this type of “conglomerate” will be a priority in 2023, the new head of IOSCO told Reuters, according to financial authorities.
For Jean-Paul Servais, regulation of “crypto” platforms can be based on key principles applicable in other areas at risk of conflicts of interest, such as financial rating agencies or index specialists. markets, an approach that would obviate the need to develop it from scratch.
Jean-Paul Servais said that if the crypto-asset space did not have its own regulations yet, the fall of FTX, which left behind nearly a million creditors and billions of dollars in losses, would make it possible for the field to move forward.
“The sense of urgency wasn’t the same as two or three years ago. It’s not a big topic or risk yet,” he explained.
“Things are changing and with the interdependence of the different types of activities, I think it’s important now that we’re able to open up the discussion, and that’s where we’re going.”
IOSCO, which coordinates regulations for G20 countries and others, has already laid out principles for regulating “stablecoins,” a specific class of crypto assets, but the focus is now on platforms that “change these assets.”
In ‘classical’ finance, there are clearly drawn demarcations between brokerage, trading, banking and issuing activities, each with its own code of conduct and regulatory framework.
“Is this the case for the cryptocurrency market? I wouldn’t say that most of the time,” said Jean-Paul Servier.
Jean-Paul Servais explained that the cryptocurrency sector has spawned many conglomerates such as FTX, which perform various roles ranging from brokerage services to custody to proprietary trading and issuance of “tokens”, with the risk of finding themselves in conflicts of interest.
“For investor protection reasons, there is a need to bring more clarity to these crypto markets through targeted oversight of the application of the IOSCO Principles to crypto assets,” he said.
“We intend to publish an advisory report on these topics in the first half of 2023,” he said.
said Jean-Paul Servais, who also heads the FSMA, the Belgian Financial Services and Markets Authority.
He emphasized this by saying, “We know there is space to develop new rules in the supervision of this type of crypto-blockchain. There is a clear need.”
(Reporting by Hugh Jones, French version by Marc Angrand, told by Blandin Henault)
by Hugh Jones