The International Organization of Securities Commissions proposed a set of new measures to address the increasing risks in digital marketing.
The Board of the International Organization of Securities Commissions (IOSCO) believes regulators on both national and international levels need more power to address increasing risks and challenges from the “digitalization of retail marketing and distribution.”
In a report published on Oct. 12, IOSCO proposes measures for its member countries to consider when determining their policy and enforcement approaches to retail online offerings and marketing, given the new challenges that rise with the proliferation of crypto assets.
Talking about these risks, the report focuses on the use of behavioral and gamification techniques and pays special attention to influencers who participate in crypto marketing, calling them “finfluencers.” Another concept the report quotes is the “digital veil.” According to the IOSCO secretary general, Martin Moloney:
“Digital fraudsters can hide behind a ‘digital veil’ that makes it difficult for regulators to locate, identify and take action against them.”
The measures themselves are hardly new. IOSCO proposes to oblige the management of crypto products to take responsibility for the accuracy of the information provided to potential investors on social media and apply “appropriate filtering mechanisms” for financial consumer onboarding.
The set of supervisory capacities that IOSCO recommends for national regulators to acquire includes regulatory channels to report consumer complaints for misleading and illegal promotions and evidence-tracking processes to cope with the fast pace and changing nature of online information.
More intriguing is the possible legal obligation for crypto companies to have specific staff qualification and licensing requirements for online marketing staff, which IOSCO also suggests.
Another proposed measure is compliance with third-country regulations — while conducting its services to foreign clients, the company would have to determine whether it could have gotten the license to do so in the client’s home country.
IOSCO has been paying greater attention to crypto this year. In March 2022, it encouraged regulators to understand the implications of decentralized finance (DeFi) developments with regard to their jurisdictions. In July, in collaboration with the Bank for International Settlements (BIS), it published guidance for the regulation of stablecoin arrangements.
Source: cointelegraph.com