Thailand SEC introduces regulations for crypto custodians: What does it entail?
- Thailand’s SEC has issued fresh regulations for digital asset service providers.
- The new rules come in light of the recent turmoil in the crypto industry.
The Securities and Exchange Commission of Thailand has unveiled a new set of regulations for digital asset service providers in the country. The new rules are a part of securities regulators’ recent efforts to increase oversight of the crypto industry and enhance consumer protections.
Contingency plan to secure client assets
The Thai SEC’s new regulations will require digital assets service providers to furnish a contingency plan in case an unforeseen event puts the platforms and the clients’ assets at risk. The press release stated:
“An audit of system security is also required as well as digital forensic investigation in case of any event affecting the security of systems related to digital asset custody.”
Thailand’s securities regulator will require firms operating in the digital assets space to establish a digital wallet management system in the interest of efficient custody of digital assets and keys. This system would also ensure the safety of clients’ assets.
The new regulations also require digital assets service providers to have certain policies and procedures in place. These policies would address the designing, development and management of digital wallets and keys.
The above-mentioned regulations came into effect on 16 January 2023. Crypto custodians who have been catering to clients since before this date are required to fully comply with the new regulations within six months.
Thailand regulators ramp up crypto regulation
Thailand’s regulators scrambled to ramp up oversight and regulation of the crypto industry last year amid the crypto contagion. Those efforts were reinforced following the collapse of Bahamas-based crypto exchange FTX.
In the interest of consumer protection, the SEC started looking into crypto advertising last year. Deeming it a vulnerable industry, the regulator called for greater control over crypto ads and enhanced cybersecurity. The regulator was in the news earlier this month for probing local crypto exchange Zipmex.