The International Organization of Securities Commissions (IOSCO) has released a report providing policy recommendations for Decentralized Finance (DeFi). The aim is to address potential risks to market integrity and investor protection in the wake of recent incidents that caused harm to investors and led to the failure of DeFi platforms.

The report emphasizes that DeFi activities are similar to traditional finance and should be approached from an enterprise-level perspective. It suggests a lifecycle approach that covers product development, deployment, governance, and operations.

To achieve outcomes equal to traditional finance, regulators are advised to adopt a functional approach and identify “Responsible Persons” who have control or significant influence over DeFi products and services. These individuals may include developers, influencers, governance token holders, and decentralized autonomous organizations (DAOs).

The report also highlights the importance of centralized crypto trading platforms and stablecoins in enabling broader DeFi activity. Adverse events affecting these platforms and stablecoins can have an impact on DeFi markets, so regulators need to monitor the interconnections between DeFi arrangements, crypto-assets, and traditional finance when assessing risks.

However, finding the right balance between user protection and innovation remains a challenge. This is particularly relevant in light of the recent decision by the US Securities and Exchange Commission (SEC) to decline a Petition for Rulemaking filed by Coinbase, the largest crypto exchange in the US.

This News Article was automatically generated by Bob the Bot (AI)

Information	Details
Geography	North America
Countries
Sentiment	neutral
Relevance Score	1
People	None
Companies	FTX, Celsius, US Securities and Exchange Commission (SEC), Coinbase, International Organization of Securities Commissions (IOSCO)
Currencies	FintruX, Stablecoin, Celsius Network
Securities	None