Thailand’s Securities and Exchange Commission (SEC) has recently introduced updated regulations aimed at enhancing investor protection in the digital asset industry.
These updated regulations focus on ensuring that investors are aware of the potential risks associated with trading cryptocurrencies. According to these updated rules, digital asset service providers must provide explicit warnings highlighting the high-risk nature of cryptocurrency trading. This risk disclosure warning for cryptocurrency trading is set to take effect on July 31, 2023.
The warning message is expected to include the following sentences: “Cryptocurrencies are high risk. Please study and understand the risks of cryptocurrencies thoroughly because you may lose the entire amount invested.“
The securities regulator demands that business operators must ensure that the warning message is easily noticeable. Also, the business operator must ensure that users provide consent and acknowledge the associated risks before they provide access to their services.
In addition to introducing a disclaimer, the Thai SEC issued guidelines that prohibit digital asset business operators from offering certain services and supporting deposit-taking and lending activities. Specifically, digital asset providers will be prohibited from accepting deposits of digital assets and subsequently using those assets for purposes like borrowing, investing, or distributing returns to depositors. The aim is to prevent platforms from soliciting or promising returns based on digital asset deposits or offering any other form of returns to depositors. These guidelines are set to come into effect on August 30, 2023.
The Thai SEC’s move towards tighter regulations on digital asset services comes after its considerations of potential risks and investor vulnerability. In March 2023, there were reports that the regulator was preparing for an open hearing to discuss the prohibition of cryptocurrency staking and lending services. The regulator initiated a process to gather public feedback on the proposed regulations that aimed to restrict virtual asset service providers (VASPs) from participating in activities related to cryptocurrency staking and lending.
With these updated regulations, the Thai SEC is taking proactive steps to create a safer and more secure environment for investors in Thailand’s digital asset industry.
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