Concerning the rapid increase of risks in digital marketing, The International Organization of Securities Commissions, (IOSCO), has proposed some measures for its member countries to consider when deciding their policy and imposition approaches to retail online offerings and marketing.
These proposed measures were written in a report published on Oct 12. The report centers on the use of behavioral and gamification techniques and influencers who participate in crypto marketing, calling them “finfluencers.”
Another area the report focused on 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.”
IOSCO, in the report, obliges regulators on both national and international levels to take risks co-existing with online marketing seriously, especially with the recent challenges that arise with the proliferation of crypto assets.
IOSCO proposed in the report that management for crypto products should apply “appropriate filtering mechanisms” for financial consumer onboarding as well as take responsibility for the precision of the information delivered to potential investors on social media platforms.
It also suggested to national regulators that regulatory channels report prospect complaints for misleading illegal promotions. Other measures proposed include crypto companies having qualifications and licensing mandates for their online marketing staff.
In addition, IOSCO reflected on third-country regulations stating that while crypto companies are providing their services to foreign clients, they should check if there’s any license they need to have acquired to be able to provide their service in the client’s respective country.
The International Organization of Securities Commissions is an association regulating the world’s securities and futures markets. In March, it published a report prompting regulators to understand the risks involved in decentralized finance (DeFi) developments and their jurisdictions.
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