Hong Kong SAR | Singapore - IOSCO publishes guidance on regulating cryptoasset trading platforms

IOSCO has published a report that describes the issues and risks associated with cryptoasset trading platforms (CTPs) and sets out key considerations intended to assist regulatory authorities in addressing these issues.

The key considerations relate to:

  • Access to cryptoasset trading platforms;
  • Safeguarding participants' assets;
  • Identification and management of conflicts of interest;
  • Transparency of operations;
  • Market integrity;
  • Price discovery mechanisms; and
  • Technology, including resilience and cyber security.

IOSCO acknowledges that the extent to which issues or risks exist or have already been mitigated may vary depending on the operational model adopted by a CTP and the existing regulatory framework. The report sets out a series of questions which may aid regulatory bodies in analysing the CTP operational models in order to assist and inform decisions related to appropriate regulatory approaches.

IOSCO recognises that this market is new and rapidly evolving. As a result, IOSCO does not intend that the key considerations and toolkits put forward in its report suggest or mandate any particular regulatory action, but represent specific areas that IOSCO believes jurisdictions could consider in the context of the regulation of CTPs.

The report does not include an analysis of the criteria that are used by regulatory authorities to determine whether a cryptoasset falls within their remit. Rather, it focuses on the trading of cryptoassets on CTPs when the regulatory authority has determined that it has the legal authority to regulate those assets or the specific activity involving those assets.