The Board of the International Organisation of Securities Commissions (IOSCO) says it will focus searchlights on cryptocurrencies, bitcoins and other electronic currencies to minimise risk.
The Securities and Exchange Commission (SEC) Nigeria, in a statement on Monday, said the resolution was an outcome of a two-day meeting at the IOSCO headquarters in Madrid, Spain.
“IOSCO resolved to focus its searchlights on cryptocurrencies, bitcoins and other forms of electronic currencies due to risks involved in trading in such assets.
“The apparent lack of adequate knowledge and awareness by the unsuspecting investing public contribute to the resolution,’’ the statement read in part.
Cryptocurrency is a medium of exchange like normal currencies such as dollar but designed for the purpose of exchanging digital information.
Such exchanging occur through a process made possible by certain principles of cryptography.
Further reports state that cryptography is used to secure transactions and control the creation of new coins.
The IOSCO board, consisting of 32 leading markets regulators in the world, had members in attendance, including Dr Abdul Zubair, SEC acting Director-General.
According to the statement, deliberations at the meeting centred on cryptocurrencies and bitcoins, data privacy and asset management.
“The comity of regulators called for caution and care before rushing into regulating the products as this may confer undue legitimacy, which may serve to deceive the general public into believing that there is regulatory faith in the products.’’
The regulators were encouraged to launch intensive public awareness initiatives to boost investor education and understanding as well as accelerate the development of the right regulatory framework as may be necessary.
“Recounting how much capital had been lost by investors in similar transactions around the world, the delegates agreed to continue discussions around the subject for the sake of the future of capital markets and players around the world,’’ the board added.
Zubair was quoted by the statement, as saying that issue of cryptocurrencies, at the moment, provides an opportunity for regulators, especially in the emerging markets to prepare for the incursion of virtual currencies into their markets.
He said that emerging market regulators should consider putting in place the appropriate regulatory frameworks that would ensure transparency, efficiency and protection for investors.
IOSCO is the global standard setting body for securities regulation –with membership covering 95 per cent of the capital markets globally.
Its members include securities market regulators, self-regulatory organisations, depositories and market intermediaries.