Thailand’s securities regulator has recently implemented new regulations for digital asset service providers. The main goal of these rules is to protect investors against potential risks associated with crypto lending and staking.
Starting from July 31, 2023, these regulations explicitly prohibit cryptocurrency platforms from using customers’ funds for lending or investment purposes. Furthermore, they disallow any returns on deposited crypto offered to customers.
The Securities and Exchange Commission (SEC) issued a ban, referencing the recent downfall of various crypto lending platforms. These platforms attracted substantial customer deposits by promising lucrative returns.
However, as the bear market hit in 2022, prominent firms like Celsius and BlockFi filed for bankruptcy, leaving investors uncertain about their investments.
The SEC has highlighted the significant risks associated with crypto lending services. These risks stem from the volatility of crypto prices, lack of transparency and accountability on platforms, as well as the potential for fraud and cyberattacks.
Notably, the new regulations, discussed and approved by the SEC during meetings on Sept. 1, 2022, Dec. 1, 2022, and May 11, 2023, are scheduled to be implemented starting from July 31, 2023.
Additionally, the regulator has cautioned that these services may infringe upon existing laws governing deposit-taking and lending activities.
Crypto Platforms Must Display Risk Warnings
The new regulations not only prohibit crypto lending services but also mandate digital asset service providers to display a clear warning message on their platforms prominently. This message serves to inform users about the substantial risks involved in trading cryptocurrencies.
Cryptocurrencies are high risk. Please study and understand the risks of cryptocurrencies thoroughly, because you may lose the entire investment amount.
The warning message must be displayed to customers before accessing the service. Additionally, the platform should seek consent and acknowledgment from users, ensuring their understanding and acceptance of the associated risks.
The Securities and Exchange Commission (SEC) announced measures aimed at bolstering investor protection and minimizing risks within the digital asset market. The regulatory body emphasized its commitment to constant monitoring, supervision, and enforcement to ensure adherence to regulations and deter illicit activities.
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In recent years, Thailand has taken proactive measures to regulate the crypto space. They have introduced licensing requirements for digital asset businesses, implemented taxes on crypto gains, and even prohibited meme coins and NFTs.
Furthermore, the Thai SEC has been actively cracking down on unlicensed crypto platforms and warning potential investors about possible scams.