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IOSCO Calls for Global Cooperation to Regulate and Understand DeFi

Key Takeaways
  • IOSCO urges transparency in DeFi, emphasizing the identification of key decision-makers for effective regulation
  • IOSCO emphasizes understanding DeFi activities and outlines regulatory steps for entities like DAOs
  • IOSCO promotes collaboration with experts, shifting towards a cooperative approach for DeFi regulation globally
27-Dec-2023 By: Simran Mishra
IOSCO Calls for Glob

IOSCO Shapes Global DeFi Rules, Ensuring Transparency and Unity

The International Organization of Securities Commissions (IOSCO) recently released recommendations to enhance understanding of decentralized finance (DeFi). While discussions on DeFi often focus on regulatory issues, IOSCO's latest report offers a detailed perspective. It highlights the importance of identifying individuals who have control or influence at the enterprise level, bringing attention to key players in the DeFi space.

IOSCO's call for transparency to help regulators navigate the complex world of DeFi platforms. The goal is to empower regulators by identifying key decision-makers in these decentralized entities, making it easier to pinpoint regulatory points of interest. By examining the economic aspects or 'enterprise level' of DeFi arrangements, regulators can gain deeper insights beyond the surface, achieving a more comprehensive understanding of the entire ecosystem.

In its 66-page report, IOSCO highlights the importance of understanding the activities and services provided by DeFi platforms. This involves figuring out if these activities qualify as the platforms or their associated individuals offering financial services. The report also provides clear steps for regulators dealing with entities governed by decentralized autonomous organizations (DAOs).

IOSCO's approach stands out for recognizing the importance of academia and research in understanding and regulating DeFi. Encouraging regulators to engage with relevant experts, the association recognizes the dynamic nature of the DeFi space and the need for ongoing collaboration between regulators and the broader ecosystem. This shift indicates a move away from a strict enforcement-focused strategy towards a more inclusive and cooperative model that prioritizes knowledge sharing.

Furthermore, IOSCO's suggestions aim to make rules for crypto markets similar worldwide. They want to treat similar activities in decentralized finance (DeFi) with the same rules and outcomes, ensuring consistency. This approach helps tackle issues related to market integrity and protects investors from potential risks associated with DeFi platforms.


IOSCO's recent report brings a fresh perspective to discussions about DeFi platforms, focusing on transparency and collaboration. The emphasis is on urging regulators to pinpoint key individuals in charge of these decentralized entities, laying the groundwork for better oversight. Recognizing the importance of academia and research in shaping regulations signals a move towards a more inclusive and informed approach to DeFi regulation. As the industry works towards mainstream acceptance, IOSCO's suggestions offer a roadmap for regulatory bodies to navigate and comprehend the complexities of the evolving DeFi landscape. 

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