According to the G20's Financial Stability Board, crypto businesses have no choice but to implement fundamental safety measures to stop explosions like those observed at FTX exchange and other crypto tragedies.
The G20 recommended that the FSB submit final recommendations on Monday regarding regulating companies that deal in cryptoassets like bitcoin. The watchdog updated its stablecoin recommendations after the TerraUSD/Luna coins were discontinued.
Both focus on strong governance to avoid conflicts of interest, proper risk management, and disclosures to ensure that customer money is segregated from company cash before the sector becomes large enough to pose a threat to financial stability.
"As recent events have illustrated, if linkages to traditional finance were to grow further, spillovers from cryptoasset markets into the broader financial system could increase," the FSB said.
The collapse of FTX in November 2022 exposed risks from cryptocurrency enterprises, and the FSB advised all nations—including those that are not watchdog members—to follow the guidelines. FTX was based in the Bahamas but was not a part of the FSB.
"Therefore, cryptoasset players need to stop operating outside the regulatory perimeter or in non-compliance with existing rules," FSB Secretary General John Schindler told reporters.
"These players can no longer argue there is a lack of regulatory clarity, as our framework makes clear the standards that should apply." Schindler said.
As the industry rebounds from last year's crash, Bitcoin has risen to 13-month highs. This recovery has been aided by Ripple Labs Inc.'s historic judicial victory on Thursday after the company had argued that tokens should fall under the purview of U.S. securities legislation.
The first complete set of regulations for cryptoasset markets has already been authorised by the European Union, but the FSB's 'global baseline' minimal requirements are made to be flexible enough to allow for jurisdictions that wish to take things a step further.
The Basel Committee and IOSCO, two international banking and securities watchdogs, are anticipated to take additional steps to further refine the FSB norms.
The first global strategy to control daily activities in the cryptocurrency market was put forth by IOSCO in May.
By the end of 2025, the FSB, whose members pledge to implement established norms, will evaluate their implementation.
(Source:www.theglobeandmail.com)
The G20 recommended that the FSB submit final recommendations on Monday regarding regulating companies that deal in cryptoassets like bitcoin. The watchdog updated its stablecoin recommendations after the TerraUSD/Luna coins were discontinued.
Both focus on strong governance to avoid conflicts of interest, proper risk management, and disclosures to ensure that customer money is segregated from company cash before the sector becomes large enough to pose a threat to financial stability.
"As recent events have illustrated, if linkages to traditional finance were to grow further, spillovers from cryptoasset markets into the broader financial system could increase," the FSB said.
The collapse of FTX in November 2022 exposed risks from cryptocurrency enterprises, and the FSB advised all nations—including those that are not watchdog members—to follow the guidelines. FTX was based in the Bahamas but was not a part of the FSB.
"Therefore, cryptoasset players need to stop operating outside the regulatory perimeter or in non-compliance with existing rules," FSB Secretary General John Schindler told reporters.
"These players can no longer argue there is a lack of regulatory clarity, as our framework makes clear the standards that should apply." Schindler said.
As the industry rebounds from last year's crash, Bitcoin has risen to 13-month highs. This recovery has been aided by Ripple Labs Inc.'s historic judicial victory on Thursday after the company had argued that tokens should fall under the purview of U.S. securities legislation.
The first complete set of regulations for cryptoasset markets has already been authorised by the European Union, but the FSB's 'global baseline' minimal requirements are made to be flexible enough to allow for jurisdictions that wish to take things a step further.
The Basel Committee and IOSCO, two international banking and securities watchdogs, are anticipated to take additional steps to further refine the FSB norms.
The first global strategy to control daily activities in the cryptocurrency market was put forth by IOSCO in May.
By the end of 2025, the FSB, whose members pledge to implement established norms, will evaluate their implementation.
(Source:www.theglobeandmail.com)
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