Crypto News: Regulators have taken significant steps to regulate crypto assets in the world of cryptocurrency. The International Organisation of Securities Commissions (IOSCO) has launched a broad framework, while Coinbase, the biggest US-based cryptocurrency market, has announced the launch of an international/global derivatives exchange. However, not all the news is good, as the crypto marketplace- Huobi is facing regulatory action in Malaysia.
Here’s a closer look at the latest developments shaping the cryptocurrency scene.
Comprehensive crypto asset regulation framework from IOSCO
The world’s first comprehensive framework for regulating crypto assets and digital markets has been unveiled by the International Organisation of Securities Commissions (IOSCO). This groundbreaking initiative responds to lessons learned from the collapse of the FTX exchange, which raised significant concerns about protecting consumers in the crypto industry. With different rules and regulations in place in different jurisdictions, the industry has been in favour of a uniform global approach in order to have consistent standards for investor protection and market integrity. These include conflicts of interest, market manipulation, cross-border regulatory collaboration, crypto-asset safekeeping, operational risk and retail client treatment.
IOSCO initiative driven by lessons from FTX collapse
IOSCO has recognised the urgent need for comprehensive regulation of crypto assets and digital markets, driven by the lessons learned from the collapse of the FTX exchange. The collapse demonstrated the vulnerabilities and risks that exist in the crypto industry, and highlighted the significance of strong investor protection regimes. To address these immediate risks and create a safer environment for market participants, IOSCO has proposed a framework. IOSCO aims to build greater trust and confidence in the rapidly evolving world of cryptocurrencies by addressing issues such as market manipulation and conflicts of interest.
Coinbase expands with international derivatives exchange launch
The launch of an international derivatives exchange has been announced by Coinbase which is the largest cryptocurrency exchange in the United States. This strategic move is a part of Coinbase’s ongoing diversification of its business and expansion of its reach beyond the borders of the United States. The Coinbase International Exchange will offer perpetual futures contracts on bitcoin and ethereum, and will be aimed specifically at institutional crypto traders outside the United States. However, before the platform can become operational, it will need regulatory approval from the Bermuda Monetary Authority (BMA). The exchange will initially serve institutional customers outside the United States, an important step in the global expansion plans announced by Coinbase in May 2022.
Global scaling plans and regulatory challenges for Coinbase
In line with its broader global scaling plans, Coinbase is expanding with the launch of an international derivatives exchange. On the regulatory front, however, the exchange is facing challenges. Adding to the legal uncertainties it currently faces, Coinbase recently received a notice from the US Securities and Exchange Commission (SEC) regarding potential lawsuits in several areas of its business. The move highlights the growing scrutiny and regulatory complexity facing cryptocurrency exchanges in the US. Despite these challenges, Coinbase continues its expansion efforts. It is committed to navigating the shifting regulatory landscape to continue offering innovative crypto services globally.
Huobi’s regulatory action in Malaysia: Securities Commission orders closure
Regulatory action has been taken against Seychelles-based crypto exchange Huobi by the Securities Commission (SC) of Malaysia. The SC has ordered the immediate closure of Huobi’s digital asset exchange in Malaysia for operating without being properly registered, which contravenes the Capital Markets and Services Act 2007. The commission publicly reprimanded the exchange and its founder, Leon Li, who was ordered to oversee the winding down of local operations. In addition, Huobi has been ordered to cease all communication with Malaysian investors, to disable its website and to withdraw its app from the app stores. Concerns about the platform’s compliance with local regulations and the protection of investors’ interests prompted the regulatory action.