The Financial Stability Board (FSB) of the leaders of the Group of 20 countries has drafted new global regulations for crypto exchanges.
The rules include measures to lower risk and prevent conflicts of interest, among other things.
G20 Says Crypto Companies Can No Longer Hide
FSB Secretary General John Schindler said all countries should adopt the crypto recommendations even if they are not Group of 20 members. The rules would not have applied to FTX because the Bahamas is not part of the FSB.
He added that the rules provide clarity exchanges need, and companies can no longer claim ignorance.
The Basel Banking Committee and International Organizations of Securities Commissions will develop more granular rules. IOSCO proposed a global approach to crypto regulation in May.
The FSB published a draft of its new recommendations in July 2022, which leaders of the Group of Seven countries (G7) pledged to put into action. They also support global Financial Action Task Force recommendations to lower money laundering risk in crypto.
The recommendations will be put into place in 2025. Leaders of the Group of Seven economies pledged to implement the rules in May.
New Bill Addresses EU Board Member’s Recommendations
Earlier this year, EU supervisory board member Elizabeth McCaul said that any evaluation of an exchange’s risk profile should consider all countries in which they operate. Hence, Europe’s Markets in Crypto-Assets bill is a good start but can be improved, she said.
The European Union passed a bill on regulating exchanges and cryptocurrencies in April which will go into effect it by the end of 2024.
Read here about cryptocurrency exchanges in Europe.
According to the G20 FSB, the new recommendations can help companies wanting to go beyond laws like MiCA. It would also provide the overarching framework McCaul says countries need to manage risk.
Last week Thursday, the US Securities and Exchange Commission (SEC) partially lost its case against Ripple Labs. The outcome of the court case could shape how US law views crypto assets.
Additionally, US Senators Lummis and Gillibrand reintroduced their Responsible Financial Innovation Act to Congress last week. Other US laws pending passage include a bill from Senators Patrick McHenry and Glenn Thompson.
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