IOSCO, the international organization in charge of market regulation, is proposing a series of new measures to regulate the promotion of financial assets, particularly on social networks.
The finfluencers in the viewfinder
The board of directors of the IOSCO considers that the various national regulators must carefully monitor thefinfluencers”. For the international organization, it is essential to fight against the risks associated with financial asset digital marketing.
On October 12, IOSCO published a rapport in which it presents a series of measures to be implemented by the national regulatory authorities. This report is part of the strong development of digital assets and some promotion which can be made of it, in particular on the different social networks. For the organization, this situation presents risks and is accompanied by challenges to be addressed by national regulators.
The report is particularly interested in what it calls the “finfluencers”, contraction de finance and influencer. The Secretary General of IOSCO says in this regard:
Scammers in the digital world can hide behind a digital veil, which makes them difficult for authorities to locate and identify. This also complicates the taking of sanctions against them.
Cryptocurrency investing is offered by eToro (Europe) Ltd as a PSAN, registered with the AMF. Cryptocurrencies are very volatile. No consumer protection.
What measures?
The OSCO declines a series of unoriginal measures. The organization proposes for example to oblige the managers of crypto products to guarantee the accuracy of the information provided to investors, particularly on social networks. It also calls for the application of appropriate screening mechanisms regarding investors.
IOSCO also calls on national regulators to equip themselves with regulatory channels to collect complaints investors regarding misleading or illegal promotions. These latter, as the news shows us are increasingly many especially on social networks. The organization also calls for the establishment of evidence tracking process to win in reactivity in the face of deceptions and scams that are gaining in speed.
IOSCO also recommends enshrining in law the obligation for companies to obtain a approval or specific qualification for people in charge of online marketing crypto products.
IOSCO is therefore more and more interested in crypto-currencies and intends to fight against abuses, particularly related to the promotion of the latter. Earlier this year, she was already encouraging regulators to inquire about better understand the DeFi ecosystem expanding.
In July, it published with the Bank For International Settlements, a guide concerning the regulation of stablecoins. Two issues which IOSCO is not the only one to take up.
Regulations in full boiling
If this report is there to guide the regulations of the various countries, many governments did not wait for this text to tackle these questions.
On the side of the European Union, MiCa has just been validated by the European Council. In the process, he obtained the favorable vote of the European Parliament. Thus, it should come into effect in 2024.
This text, although stripped of a few key measures such as the prohibition of proof of work, worries many observers of the blockchain industry. The latter believe that it could strongly harm the development of the crypto ecosystem in Europe. A new turn missed by the European Union after that ofInternet in the early 2000s.
In the USA, the SEC takes a strong interest in the Ethereum network. The network is under surveillance and the regulator wants to use the presence of Ethereum nodes on its territory as an argument for place it under its jurisdiction.
Another major player, the CFTC (Commodity Futures Trading Commission), could become the regulator of spot markets in crypto-currencies. Under the apparent desire to protect investors, it could thus toughen the legislation concerning crypto investment in the United States, in particular in imposing limits to retail investors.
The regulations and crypto regulation is accelerating. As the market develops, authorities are increasingly interested in this growing sector. The next few months will therefore be decisive for the future of the crypto ecosystem.
For more on five cryptos that could explode in 2023, find our article here.
