In an era where the financial landscape is continually shifting, the International Organisation of Securities Commissions (IOSCO) is urging global regulators to take assertive, swift action to regulate cryptocurrency markets. Referred to as the ‘wild west’ of finance, the world of cryptocurrency continues to operate with a degree of impunity that IOSCO believes needs correction.
Under the stewardship of Martin Moloney, the IOSCO secretary-general, an 18-point plan has been drafted, providing a roadmap to stabilise this financial frontier. Moloney pointed out the urgency for jurisdictions to act: “The divergence across jurisdictions isn’t a matter of different directions, but the lack of advancement in the direction they all know they should take,” he said, pressing for adoption of this standard as quickly as possible.”
Addressing Service Providers’ Conflicts of Interest
While regulation frameworks are being developed worldwide, another concerning area is the potential conflicts of interest by crypto service providers. The issue arises as many crypto exchanges offer various services such as broking, trading, custody, and market-making, usually segregated in traditional financial firms.
Lim Tuang Lee, Chairperson of the IOSCO Board-Level Fintech Task Force, highlighted the need for crypto-asset service providers to redress these conflicts of interest. In his words, they should “take far more seriously the right of clients to have their monies and assets carefully minded and accounted for.”
IOSCO Call: Implications for the iGaming Industry
Reflecting on these calls for enhanced regulation and transparency, several key implications emerge for the iGaming industry:
- Improved Consumer Protection: A standardised regulatory framework for cryptocurrency would enhance the protection of consumers’ digital assets, creating a safer online betting environment, especially for players of crypto lotteries and crypto casinos.
- Increased Trust: Greater oversight and regulation in the crypto market can instil a higher level of trust among users, potentially driving more traffic towards iGaming platforms that accept cryptocurrency.
- Business Adaptability: Companies in the iGaming industry would need to swiftly adapt their business models and strategies to comply with the new regulations, potentially prompting innovation in the industry.
