The first global approach to regulating cryptoasset and digital markets was published by the international securities watchdog IOSCO on Tuesday, building on the lessons learned from the collapse of the FTX exchange last year, which stoked concerns about consumer safety.

As different jurisdictions have their own regulations, the industry, which normally simply needs to comply with anti-money laundering procedures, has been asking for a worldwide approach to regulation.

The actions follow the U.S. bankruptcy filing of cryptocurrency exchange FTX in November of last year due to a liquidity shortage.

Regulators from all around the world intervened as a result, stating that laws were necessary to prevent conflicts of interest for crypto “conglomerates” like FTX that mix numerous businesses under one roof with insufficient safeguards for user assets.

The initiatives announced on Tuesday mark a turning point in addressing the risks associated with cryptocurrencies like bitcoin and ether, according to Jean-Paul Servais, the head of the International Organisation of Securities Commissions (IOSCO).

“Crypto business has been allowed to grow on a flawed basis and it has to be corrected,” Servais told a press conference.

Conflicts of interest, market manipulation, international regulatory cooperation, custody of cryptoassets, operational concerns, and treatment of retail clients are all addressed in the proposed standards.

“Recent global events have shown us why we need this work. This is about making sure crypto is safe for the market,” said Matthew Long, director of digital assets at Britain’s Financial Conduct Authority.

Frameworks like those of IOSCO, according to Haydn Jones, global lead of blockchain and crypto solutions at Kroll, prevent illicit conduct while enabling everyone to gain from the technology behind cryptocurrencies.

The 18 planned solutions aim to remove conflicts of interest between the various components of a crypto transaction by implementing well-known safeguards from existing markets.

The watchdog expects its 130 members worldwide to use the guidelines once they are finalised by the end of the year to fill in any gaps in national rulebooks. This will eliminate fragmented regulation and the capacity of businesses to pit regulators against one another.

IOSCO, an umbrella organisation of regulators including the U.S. Securities and Exchange Commission, the Financial Services Agency of Japan, the Financial Conduct Authority of the United Kingdom, and the BaFin of Germany, is polling the public on the issue.

The action comes as the European Union this month finalised the first set of comprehensive standards in the world, increasing pressure on Britain, the United States, and other nations to develop their own guidelines.

IOSCO will make suggestions to control decentralised finance later this summer.

(Adapted from TheEconomicTimes.com)