Thailand’s Security and Exchange Commission (SEC) has recently released new guidelines aimed at regulating crypto exchanges operating in the country. The move comes as Southeast Asian countries, following Singapore’s lead, are taking steps to protect investors from the volatile crypto market.
The guidelines include a ban on crypto firms offering deposit-taking and lending services, as well as a requirement for crypto operators to disclose a mandatory disclaimer of trading risks for investors on their websites. These measures have been implemented to promote transparency and caution in the crypto trading space.
Thailand has been actively working to reshape its crypto ecosystem since the massive collapse of the crypto market in September 2022. During this market downturn, well-known crypto lending companies such as Celsius faced financial collapse and filed for bankruptcy. This left billions of investors’ funds trapped. To avoid a repeat of such a disastrous event, Thai’s SEC regulators engaged in crucial meetings from September to December 2022.
The result of these meetings is the set of guidelines that received official approval in May 2023. Under the new regulations, crypto exchanges are prohibited from using investors’ capital for lending and investment purposes. The exchanges can no longer offer or support any returns on customer-deposited currency. This move aims to safeguard investors from the risks associated with lending services.
Crypto businesses are also forbidden from advertising or persuading the public to support their staking and lending services. This signifies a complete ban on crypto lending in the country. The guidelines are set to be effective from August 30, 2023.
In an effort to enhance investor protection, it is mandatory for exchanges to provide customers with clear risk warnings regarding crypto investments. Crypto businesses must display prominently visible risk warnings, informing customers that cryptocurrencies are high-risk investments and that they may lose their entire investment amount. Users must consent and acknowledge these risks before proceeding with their investments.
Furthermore, the guidelines require customers to receive an investment suitability assessment to determine their appropriate investment proportions. These measures are aimed at ensuring that customers are well-informed before venturing into the world of crypto.
Thailand’s SEC has consistently placed investor protection at the forefront of its crypto regulation policy. In September 2022, the regulatory body issued an announcement requiring crypto companies to disclose investment risks and warnings while advertising their services.
Overall, Thailand’s SEC is making significant strides in creating a safer and less-risky environment for investors in the country’s crypto ecosystem. With the implementation of these guidelines, the SEC aims to shield investors from the risks associated with the highly volatile crypto market and ensure they are adequately informed before making investment decisions.