The Board of the International Organization of Securities Commissions (IOSCO) believes that regulators, both nationally and internationally, need more power to address the growing risks and challenges associated with the “digitalization of retail marketing and distribution.”

In a report published on October 12, IOSCO proposes measures that its member states can consider when defining their retail offering and online marketing enforcement policies and approaches, given the new challenges that are exacerbated by the proliferation of cryptoassets.

Talking about these risks, the report focuses on the use of behavioral and gamification techniques, with a particular focus on influencers who are involved in crypto marketing, referring to them as “financiers.” Another concept the report refers to is “digital blur”. According to IOSCO Secretary General Martin Moloney:

“Digital scammers can hide behind the digital veil, making it difficult for regulators to find, identify and take action against them.”
The measures themselves can hardly be called new. IOSCO is proposing to oblige the management of crypto products to take responsibility for the accuracy of the information provided to potential investors on social networks and use “appropriate filtering mechanisms” to familiarize consumers of financial services.

The set of oversight functions that IOSCO recommends that national regulators acquire include regulatory channels for reporting consumer complaints about misleading and illegal promotions and evidence tracking processes to cope with the fast pace and changing nature of online information.

Even more intriguing is the possible legal obligation for crypto companies to have specific qualification and licensing requirements for online marketing staff, which IOSCO also proposes.

Another proposed measure is to comply with third country rules: while a company provides services to foreign clients, it must determine whether it could obtain a license to do so in the client’s country.

This year, IOSCO has paid more attention to cryptocurrencies. In March 2022, he called on regulators to understand the implications of the development of decentralized finance (DeFi) in relation to their jurisdictions. In July, in collaboration with the Bank for International Settlements (BIS), he published a guide to regulating stablecoin mechanisms.

Source: CoinTelegraph

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