IOSCO calls for tighter regulation of cryptocurrency exchanges

The International Organization of Securities Commissions (IOSCO) calls on regulators around the world to tightenthe rules of cryptocurrency exchanges and their methods for verifying users.

This week IOSCO called on regulators to morePay close attention to the regulation of cryptocurrency exchanges and how they verify their clients. The organization claims this will reduce the risks of money laundering.

In addition to stricter KYC policies, the associationalso invited regulators to consider restricting the operation of crypto-asset trading platforms with regulated intermediaries trading on behalf of their clients.

IOSCO also wants regulators to evaluateDo customers of cryptocurrency trading platforms receive “sufficient risk information”. According to the association, this will not only protect investors, but also help reduce the volume of illegal operations carried out on cryptocurrency exchanges.

“It is currently not possible to provide accuratea list of risks, problems and desired results, and it is also inappropriate to set new standards or requirements for the cryptocurrency industry, ”IOSCO said in a statement.

The association also raised the issue of compensation.Investors of funds lost as a result of hacking or bankruptcy of the exchange. IOSCO called on regulators to either introduce capital controls on cryptocurrency exchanges, or to ensure that there are insurance funds or compensation principles that cryptocurrency trading platforms must adhere to.

Some cryptocurrency exchanges are already engagedinsurance of user funds. For example, in October, Binance U.S insured user funds with the US Federal Deposit Insurance Corporation. In addition, at the beginning of the year, the Bittrex exchange insured users’ crypto assets for $300 million.

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