Tech Regulations & Govt | |
Tech Regulations & Govt | |
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Thursday, December 24, 2020 / 07.47AM / By IOSCO /
Header Image Credit: currency.com
The Board of the International Organization of Securities Commissions on
December 22, 2020 published a report that seeks to help
regulators inform retail investors about the risks and characteristics of
crypto-assets.
Crypto-assets carry risks that retail investors may
not fully understand, increasing the chance of losses on investments in these
assets. The IOSCO report titled Investor
Education on Crypto-Assets identifies an
array of possible risks to investors, including such things as lack of market
liquidity, volatility, partial or total loss of the invested amount, insufficient
information disclosure and fraud.
The report describes methods that regulators can use to provide
educational material to retail investors on the
risks of investing in crypto-assets and offers four areas of guidance covering
the following activities:
In recent years, IOSCO members have expressed
concerns about the use of crypto-assets in areas ranging from trading, custody,
clearing and settlement, accounting, valuation, intermediation and investment
funds. In response, the IOSCO Board identified crypto-assets as one of its top
work priorities for 2019 and 2020.
In January 2018, IOSCO issued a Statement on concerns related to
Initial Coin Offerings (ICOs), noting the risks associated with ICOs,
particularly regarding parties that target retail investors through online
distribution channels, often from outside the investors' home jurisdiction. Crypto-assets
distributed in an ICO are highly risky investments and vulnerable to abuse and
fraud.
In 2019, as the first step in developing the
educational material, IOSCO´s Committee 8 on Retail Investors conducted a
fact-finding survey of its members regarding crypto-assets. IOSCO acknowledges
that not all of the report´s material or educational approaches may be
appropriate for all member jurisdictions or consistent with all members' legal
and regulatory frameworks. Instead, it recommends that members adopt the
material and educational approaches best suited to their respective
jurisdictions.
An Appendix to the report provides examples of IOSCO members' use of different investor activities and initiatives regarding crypto-assets.
Related
Links
1.
Investor Education on
Crypto-Assets - IOSCO
2.
Statement on concerns related to Initial Coin Offerings (ICOs)
- IOSCO
3.
The World Federation Of
Exchanges Responds To IOSCO's Consultation On Crypto-Asset Trading Platforms
- Proshare
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