Thailand’s Securities and Exchange Commission (SEC) is preparing to hold another open hearing on the possibility of outlawing cryptocurrency staking and lending services.
According to reports, Thailand’s SEC is seeking public input on a proposed regulation prohibiting virtual asset service providers (VASPs) from engaging in cryptocurrency staking or lending activities.
The Thai regulatory agency’s new policy will prohibit VASPs from using user deposits for lending or staking services. This measure aims to protect investors from potential harm in case these services are suddenly terminated. Furthermore, the proposed legislation seeks to provide clarity on the extent of oversight for digital asset businesses, which are not currently subject to complete regulation.
According to the Thai SEC, the new regulation aims to enhance investor protection, reduce associated risks, and eliminate confusion regarding whether deposit-taking and lending services are subject to the same regulations as regulated digital asset enterprises.
The proposed legislation aims to prevent VASPs from using user deposits for lending, staking, or any other similar purposes. Additionally, it would prohibit VASPs from offering interest on cryptocurrency holdings or advertising such services.
According to the securities regulator’s report, a public hearing on the underlying principles of the proposed regulation was conducted in September and October 2022.
On January 7, 2023, the Thai SEC introduced a new regulation mandating virtual asset service providers (VASP) to implement a digital wallet management system to ensure secure custody of cryptocurrencies.
This regulation specifically applies to VASPs or crypto custodians offering digital currency storage services. The legislation outlines three essential prerequisites, including a risk management strategy, guidelines for digital wallets and private keys. VASPs must report these policies to the relevant regulatory authorities and present a compliance plan for their implementation.
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