Key Takeaways:
- Thailand’s SEC mandates risk warnings for cryptocurrency business operators, effective July 31, 2023.
- A prohibition on providing or supporting certain deposit-taking and lending services in the digital asset space will be in effect from August 30, 2023.
- The regulations aim to protect investors and ensure they are informed of the risks associated with cryptocurrency trading.
Thailand’s Securities and Exchange Commission (SEC) has recently taken critical steps to regulate the burgeoning cryptocurrency industry in the nation. The cryptocurrency market in Thailand has witnessed significant growth over the years, with a rising number of investors and traders.
This growth has necessitated robust regulatory measures to protect investors from the inherent risks of cryptocurrency trading. Before these recent actions, the SEC had put in place certain regulations and guidelines aimed at safeguarding the interests of investors.
However, given the dynamic nature of the cryptocurrency market, the SEC felt the need to further bolster these regulations. In its meeting No. 12/2022 on September 1, 2022, the SEC approved the requirement for cryptocurrency business operators to disclose security warnings regarding the risks of cryptocurrency trading.
The updated guidelines were developed in meetings No. 16/2022 on December 1, 2022, and No. 9/2023 on May 11, 2023. The new regulations, announced in the Royal Gazette, entail two primary mandates.
First, cryptocurrency business operators, including trading centers, brokers, and traders, must disclose warnings regarding the high-risk nature of cryptocurrencies. The warning message must be clear and conspicuous, stating,
“Cryptocurrencies are high risk. Please study and understand the risks of cryptocurrencies thoroughly because you may lose the entire amount invested.”
This disclosure must be acknowledged by the customers before using the service, effective July 31, 2023. Secondly, the SEC has prohibited digital asset business operators from providing or supporting deposit-taking and lending services, with specific exceptions.
This entails not accepting deposits of digital assets for borrowing, investment, or paying returns to depositors. The prohibition also extends to advertising or promoting such services, effective August 30, 2023.
These regulations signify the SEC’s dedication to ensuring a secure and informed trading environment for cryptocurrency investors in Thailand, reflecting an evolving landscape in crypto regulation.
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