Thai SEC Will Strengthen Crypto Regulations And Safeguard Investors


A top Thai regulator has emphasized the need of establishing tougher regulations on advertisements that relate to cryptocurrency.

Following the collapse of the FTX exchange, Thailand has become the most recent country to add its name to the ever-expanding list of countries that are mulling over whether or not to revise their crypto legislation.

In addition, it intends to tighten the rules that regulate the industry and put a focus on the protection of investors, which is consistent with the practices of the majority of these countries.

According to a report that was released by the Bangkok Post on December 13, the Securities and Exchange Commission (SEC) of Thailand is mulling over the possibility of imposing even stricter regulations on digital assets “to imitate the worldwide market.”

Reportedly, in order to support such a decision, authorities from the SEC highlighted the failures of FTX, Three Arrows Capital, the TerraUSD, Celsius Network, and Zipmex, a local exchange. Other examples were also provided.

The authorities have also indicated their concern with the current advances in cryptocurrency advertising, most notably the use of “finfluencers” to disseminate the message, which may have been deceptive to the general public and forced them to assume needless investment risks.

They came to the conclusion that the business sector dealing in digital assets was “vulnerable” and required some kind of oversight.

The SEC has identified the major areas in which it will concentrate its efforts as investor protection, regulation of cryptocurrency advertising, the avoidance of conflicts of interest, and cybersecurity. These were selected as the primary areas where the agency will focus its attention.

It has established a working group consisting of both public authorities and business stakeholders in order to evaluate and draft the necessary adjustments to the rules that are already in place. The purpose of this group is to evaluate and draft the necessary adjustments to the rules that are already in place.

It’s worth noting that this isn’t the first time the Thai SEC has taken action over crypto advertising restrictions, which is an interesting fact to keep in mind.

When it went into force in September, it demanded that market players provide their consumers clear warnings about investments. Since then, they have been complying with this requirement.

In the same month that the hearing was held, the Securities and Exchange Commission (SEC) opened a public hearing on its attempt to restrict cryptocurrency platforms from offering or supporting digital asset depositories. The topic of the hearing was the SEC’s attempt to restrict cryptocurrency platforms from offering or supporting digital asset depositories.

Zipmex, which is considered to be one of the most major exchanges on a national level, was impacted by the wave of failures that slammed the cryptocurrency business in Thailand.

The Securities and Exchange Commission (SEC) has accused Zipmex and its co-founder Akalarp Yimwilai of violating local rules and has sent the issue to the local police for further investigation.


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Thailand’s SEC Moves to Revoke Huobi’s License

Thailand’s Securities and Exchange Commission (SEC) has asked Huobi to halt its service operations in the country, citing the trading platform’s failure to implement the necessary requirements as defined by the country’s securities laws.

As announced by the market regulator, investigations have revealed that Huobi was not fit to operate its business in Thailand based on the exchange’s failure to abide by laid down rules in its management structure and work system.

For a while now, there has been a lot of back and forth between the commission and Huobi. The regulator has asked the exchange to suspend its operations pending its license temporarily. However, the trading firm has often requested extensions.

One of the many ultimatums given to Huobi has to meet its requirements has elapsed, and the regulator appears to be showing no more room for deadline extensions.

“The SEC has the resolution to recommend to the Minister of Finance to consider revoking the business license of Huobi (Thailand) Co., Ltd. (Huobi), which is now renamed DSDAQ (Thailand) Co., Ltd. In the meantime, the SEC has approved Giving Huobi to temporarily suspend its services as a digital asset trading centre until the business license is revoked. And during the suspension of such services, Huobi must return all assets to customers within three months from the date the SEC has a resolution to order,” the announcement detailed.

Exchanges have been hitting it off with regulators around in recent times. The current quit notice issued to Huobi models was issued to Binance exchange by the United Kingdom Financial Conduct Authority (FCA) back in June. The fundamental requirement is to implement Know Your Customer (KYC) procedures, with several exchanges always defaulting in this regard. 

Several exchanges in South Korea are also on the verge of being blocked by the country’s market watchdog, as many are finding it challenging to meet the regulator’s demands for registration. Only Upbit and a few others are clear against the September 24 deadline per an earlier report. Clampdown on non-compliant exchange is encompassing and not peculiar to Huobi.

Image source: Shutterstock


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Thai Securities Regulator Propose Fresh Legislation for Crypto Custodians

Cryptocurrencies can no longer be classified as a niche sector in light of the tremendous development made. At the moment, the primary worry with this emerging industry seems to be with regulations that define how the technology fits into our present economy.

As of now, Thailand’s Securities and Exchange Commission (SEC) has taken the next step in this direction, soliciting public comment until late September on the proposed crypto custody laws. 

Crypto Exchanges in the Crosshair

The Thai Securities and Exchange Commission (SEC) proposed new laws on Wednesday concerning the custody of investors’ cryptocurrency assets held by digital asset business operators. The latest proposed regulations include both fiat money custody for digital asset accounts and cryptocurrency lending, or earning interest on cryptocurrency holdings.

The SEC is explicitly trying to ban crypto businesses from utilizing investor assets for the “benefit of another client or other persons,” or from profiting from both investors’ fiat money and digital assets, including digital lending to other persons. The proposal states that “seeking benefits from clients’ fiat money shall be prohibited except in the form of deposit with commercial banks.”

The proposed legislation also suggests a new structure for withdrawing and transferring fiat money from digital asset accounts, which must adhere to the concepts of “decentralised approval authority, multi-sign approval authority, and check and balance.”

The guidelines, according to the SEC, will improve investor safety and the dependability of cryptocurrency service providers by guaranteeing that records of investors’ holdings are correct and up to date.

As of now, the SEC is now requesting public comments on these newly proposed regulations till September 22. 

The Thai SEC has been aggressively implementing new crypto sector regulations this year, despite the country’s surging cryptocurrency usage. In March, the authority suggested imposing a minimum yearly income threshold of $32,000 for investing in cryptocurrencies such as Bitcoin (BTC). In June, the regulator prohibited crypto exchanges from processing certain token types, including non-fungible tokens.

CBDC Coming Soon

Meanwhile, The Bank of Thailand (BOT) has revealed that it plans to develop and test its retail CBDC in the second quarter of 2022. The central bank has announced that initial pilot tests would be conducted within a limited group under the BOT. Once the test is successful, the central bank will expand the CBDC to the public, retail stores, banks, and non-banking facilities.

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Thailand’s Central Bank Cautions Against Using Crypto as a Means of Payment

The Bank of Thailand (BOT) has issued a warning against using digital assets as a payment method, stating it could work with the country’s Securities and Exchange Commission (SEC) if crypto payments become widespread. 

BOT Against the Widespread Adoption of Crypto for Payments

The BOT made the warning in a press release on Thursday (July 8, 2021). According to the Thailand central bank, the use of digital assets as a payment means posed certain risks to the payer and the recipient, such as money laundering, price volatility, and cyber theft. 

Also, the BOT noted that businesses were beginning to accept cryptocurrencies such as bitcoin and ether for payments of goods and services. Meanwhile, the apex bank reiterated that it did not recognize these digital assets as legal tender in Thailand. 

The BOT added that “doing so constitutes barter trade between the owner of the digital asset and the provider of goods and services, where the payer and the receiver mutually accept all risks involved.”

While the Thailand central bank is warning against the use of crypto for payments, the BOT, however, is ready to apply some regulatory measures if such adoption becomes widespread. 

An excerpt from the announcement said:

Should the use of digital assets as a means of payment for goods and services become widespread, the BOT will coordinate with the Securities and Exchange Commission (SEC) and other related agencies to take the necessary measures to ensure that they do not pose extensive risks to the general public or the economic and financial system.”

The BOT becomes the latest central bank to warn against using digital assets for payments. As previously reported by BTCManager in June, the Bank of Indonesia banned the use of crypto as a payment method. The Central Bank of the Republic of Turkey also took similar action

Thailand’s Regulatory Policies for Crypto

Meanwhile, the BOT said that it was still working on issuing a central bank digital currency (CBDC), and on formulating policies for stablecoins. The BOT earlier revealed plans to regulate stablecoins in March but said it would work with market participants and relevant stakeholders before releasing a final regulatory framework. 

Thailand has been known to issue policies for different aspects of the crypto industry. Earlier in the year, the Thai SEC announced a proposed rule that suggested investors must have a minimum of 1 million baht ($30,696) to invest in crypto. 

However, the proposal received backlash from stakeholders in the country, who believed that the rule would exclude middle and low-income earners from the cryptocurrency market. The Thai SEC issued a clarification on the matter, stating that there was no intention to implement the qualifications stated in the proposal. 

In June, the regulator banned the trading of fan tokens, meme tokens, non-fungible tokens (NFTs), and exchange tokens on local exchanges. 

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Bank of Thailand Set to Regulate Stablecoins, Says Bank Official

The Bank of Thailand (BOT) is set to draft regulations on stablecoins by the end of 2021. This comes following growing criticism from financial regulations regarding unlicensed stablecoins issued by private companies. 

Thailand Consulting With Stakeholders on Stablecoins Regulation

This latest development was revealed by the Central Bank’s assistant governor, Siritida Panomwon Na Ayudhya on Friday. Siritida said in a briefing that the apex bank was in talks with market regulators and participants before concluding stablecoin regulations. 

She also stated that the regulations would be comprehensive and cover all types of stablecoins that are not illegal. The Bank of Thailand (BOT) will regulate foreign currency-backed stablecoins, asset-backed stablecoins, and algorithmic stablecoins that are not illegal. 

The central bank chief also noted that the regulations will not cover crypto-assets that are not backed by real assets. ”The rules will not cover those without asset backing, such as Bitcoin or Ethereum and investors will have to take their own risks”. She added. 

Issuers of baht-backed stablecoins will be required to get a central bank license to be classified as electronic money. The central bank will also oversee risks associated with e-money which includes money laundering and illegal funding.  This latest development comes after the apex warned against a new baht-denominated stablecoin THT. BOT stated that the stablecoin could expose users to cyber theft and money laundering.

BOT Exploring Central Bank Digital Currency

Siritida also confirmed that the latest policy on stablecoins puts Thailand in the same category with countries like Singapore and Japan. She also confirmed that the bank explored the benefits of digital currencies in fintech and was eager to deploy innovations. 

It is currently in the process of developing a retail central bank digital currency. The BOT will continue monitoring developments of new technologies and adopt policies that support the economy and can maintain financial system stability, she added. 

Regulations of cryptocurrencies have dominated the financial space in Thailand in recent months. The Thai SEC caused a stir in February when it drafted a proposed regulation for cryptocurrencies that caused significant controversy. The draft proposal had stipulated that new crypto investors must possess an annual income of 1 million baht. 

The Thai crypto community rejected the proposal as it essentially cuts off retail investors from accessing cryptocurrencies in the country. Although the SEC later retracted its initial stance, stating that it was part of the consultation phase. It has not stopped the perception that the Thai government wants to pass strict crypto regulatory laws. 

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Thailand’s Stock Exchange Excludes Cryptos from Upcoming Digital Asset Exchange Platform

Thailand’s stock exchange is preparing to launch a new trading platform that would not include cryptocurrencies.

Crypto Exempted From SET’s Planned Trading Platform

According to the Bangkok Post on Wednesday (Jan. 20, 2021) the Stock Exchange of Thailand (SET) announced plans to launch a digital assets trading platform. The upcoming platform will include different tokens except cryptocurrencies.

The Thailand bourse noted that the tokens must meet certain criteria before they would be listed on the platform. The requirements include:

“First, the token must have an underlying asset that investors can analyze on value. Second, it must be a valuable product that supports economic activities. Third, the product must have benefits to society and the environment.” 

Meanwhile, Kitti Sutthiatthasil, the SET’s executive vice-president noted that crypto assets cannot be listed on the trading platform because they do not meet the above criteria. While Kitti acknowledged that some countries were adopting crypto because of their weakening economy, the SET executive stated that cryptocurrency could also be used for money laundering.

Kitti added that with Thailand’s strong economy and stable currency, there was no imminent need for the bourse to support cryptocurrency.

Kasikorn Business Technology Group (KBTG), a branch of the Kasikornbank, will be in charge of sourcing and screening products entering the new marketplace. The KBTG has worked with the SET to develop a blockchain and digital assets investment service which seeks to join Thailand-based exchanges, ICOs, and digital wallets under one platform.

As reported by BTCManager, SET first revealed plans of its digital asset platform back in 2019. The Thailand bourse is planning to launch the new trading platform in the second half of 2021.

Major Thai Crypto Exchange Receives Notice From Country’s Regulator

Meanwhile, local cryptocurrency exchange Bitkub Online temporarily shut down after receiving a notice from Thailand’s Securities and Exchange Commission (SEC) to put its platform in order. The crypto exchange experienced three outages in January alone, following a surge in demand for cryptocurrencies.

According to the report, Bitkub’s daily trading volume skyrocketed from 200-300 million baht to 1-2 billion. The inability to handle the rise in volume caused the platform’s trading system to crash multiple times. Consequently, the Thai regulator in its notice gave the crypto exchange five days to resolve a list of issues on its platform.

Thailand’s strict crypto regulatory framework, while it seeks to protect investors, has caused some exchanges to shutter their services in the country.

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