The International Organization of Securities Commissions (IOSCO) has released suggestions to curtail the risks associated with the marketing of virtual currencies. The body made the proposed regulatory framework public via a report published on October 12, illustrating the risks and proffering solutions.
Part of the risks IOSCO identified include using gamification and other psychological techniques to lure new persons into investing in virtual assets. The IOSCO sees the use of celebrities or influencers to market projects as a major threat, with the report noting that these “finfluencers” can wield a great degree of control for new investors in the space.
“Digital fraudsters can hide behind a ‘digital veil’ that makes it difficult for regulators to locate, identify and take action against them,” said Martin Moloney, secretary general of the IOSCO.
In order to curtail these risks, the body issues a policy and an enforcement toolkit while pointing out that both measures will have to operate in synergy before any meaningful progress can be made. The IOSCO proposes that member countries should level the playing field for online marketing for digital assets and streamline the rules for onboarding new clients.
However, before these policies are implemented, member countries should ensure that the mechanisms for surveilling the activities of the industry operators are present. On the enforcement side, “proactive technology-based detection and investigatory…
