Global watchdog calls for UK to regulate crypto in same way as stocks and bonds

theguardian.com:

The global markets watchdog has urged the UK to regulate cryptocurrencies in the same way as traditional assets such as stocks and bonds, countering MPs’ calls last week for the risky investments to betreated as a form of gambling.

The International Organization of Securities Commissions (Iosco) – an umbrella group of regulators from 130 jurisdictions – made the recommendation as part of the first set of international guidelines for crypto regulation.

Iosco said its members, which include the UK’s Financial Conduct Authority (FCA) and the Securities and Exchange Commission in the US, should be protecting investors and ensuring “market integrity” in ways that “are the same as, or consistent with, those that are required in traditional financial markets”.

That includes requiring trading platforms to publicly disclose how they vet crypto assets before allowing them to be traded, clearly explain how they store and safeguard clients’ crypto assets, and ensure they are separated from the firm’s own assets that might be used for proprietary trading.

The global body, which drew on the lessons from a series of scandals including the collapse of the FTX cryptocurrency exchange last November, said this would help create “a level playing field between crypto assets and traditional financial markets”.

Iosco also said global standards were crucial for avoiding regulatory arbitrage – a practice in which businesses take advantage of loopholes in different countries’ regulations.

However, the body’s recommendations run counter to those put forward by British MPs on the Treasury select committee, who said cryptocurrency trading should be regulated as a form of gambling. The committee expressed concerns that trading in crypto assets can be