IOSCO Regulates Crypto and Coin Base Expands Globally
Nova Reyes
Markets Navigator
TL;DR: Regulators are taking significant steps to regulate crypto assets globally. IOSCO has introduced a comprehensive framework, while Coinbase is expanding its operations internationally with a new derivatives exchange.
Key takeaways:
- IOSCO has launched a comprehensive framework for regulating crypto assets.
- The framework aims to protect consumers and ensure market integrity.
- Coinbase is launching an international derivatives exchange for institutional traders.
- Regulatory challenges persist for Coinbase in the U.S.
- Huobi faces regulatory action in Malaysia for operating without proper registration.
What is IOSCO's comprehensive crypto asset regulation framework?
The International Organisation of Securities Commissions (IOSCO) has unveiled the world’s first comprehensive framework for regulating crypto assets and digital markets. This initiative responds to lessons learned from the collapse of the FTX exchange, which raised significant concerns about consumer protection in the crypto industry. The framework aims to establish consistent standards for investor protection and market integrity across different jurisdictions. Key areas of focus include conflicts of interest, market manipulation, cross-border regulatory collaboration, crypto-asset safekeeping, operational risk, and retail client treatment.
Why is IOSCO's initiative driven by lessons from the FTX collapse?
IOSCO recognized the urgent need for comprehensive regulation of crypto assets and digital markets, driven by the vulnerabilities exposed by the FTX collapse. This incident highlighted the importance of strong investor protection regimes. To address these risks and create a safer environment for market participants, IOSCO proposed a framework that aims to build greater trust and confidence in the rapidly evolving world of cryptocurrencies by tackling issues such as market manipulation and conflicts of interest.
How is Coinbase expanding with its international derivatives exchange?
Coinbase has announced the launch of an international derivatives exchange, marking a significant step in its global expansion strategy. This exchange will offer perpetual futures contracts on bitcoin and ethereum, targeting institutional crypto traders outside the United States. However, the platform requires regulatory approval from the Bermuda Monetary Authority (BMA) before becoming operational. This move is part of Coinbase’s ongoing efforts to diversify its business and extend its reach beyond U.S. borders.
What are the global scaling plans and regulatory challenges for Coinbase?
As Coinbase expands with its international derivatives exchange, it faces several regulatory challenges. Recently, the exchange received a notice from the U.S. Securities and Exchange Commission (SEC) regarding potential lawsuits in various areas of its business. This highlights the increasing scrutiny and regulatory complexity facing cryptocurrency exchanges in the U.S. Despite these challenges, Coinbase remains committed to navigating the evolving regulatory landscape to continue offering innovative crypto services globally.
What regulatory action has been taken against Huobi in Malaysia?
The Securities Commission (SC) of Malaysia has taken regulatory action against the Seychelles-based crypto exchange Huobi. The SC ordered the immediate closure of Huobi’s digital asset exchange in Malaysia for operating without proper registration, violating the Capital Markets and Services Act 2007. The commission publicly reprimanded the exchange, and its founder, Leon Li, has been ordered to oversee the winding down of local operations. Huobi has been instructed to cease all communication with Malaysian investors, disable its website, and withdraw its app from app stores due to compliance concerns and the need to protect investors' interests.