Thailand: SEC proposes new amendments for digital asset business operators
Thailand is gradually becoming one of Asia’s strongest crypto-strongholds. Publicly-listed companies are following an emerging trend of including Bitcoin on their balance sheets as the country’s digital asset industry continues to grow.
However, not without seeking permission from the local regulatory board.
“… the authority is “seeking public comments on additional amendments to the regulations on custody of clients’ assets in digital asset businesses, which includes keeping custody of fiat money and seeking benefits from the clients’ assets for the clients’ interest.”
The proposed regulations related to custody of clients’ assets include,
- Custody of fiat money: Withdrawal and transfer of fiat money from the accounts opened for the benefit of clients shall comply with the principles for decentralized approval authority, multi-sign approval authority, and check and balance, in a similar manner as custody of digital assets
- Custody of fiat money and digital assets: The use of a client’s assets for the benefit of another client or other persons shall be prohibited and clients’ assets shall be reconciled every business day to ensure accurate and updated records of clients’ assets
- Seeking benefits from clients’ assets: Seeking benefits from clients’ fiat money shall be prohibited except in the form of a deposit with the commercial bank(s). In this regard, digital asset business operators and clients may agree on an interest rate not exceeding the actual rate the business operators receive from the commercial bank(s). In the case of digital assets, seeking benefits for clients shall be prohibited, including in the form of digital asset lending to other persons.
According to the regulator, these rules will strengthen investor protection and the reliability of crypto-service providers. These will also ensure that records of investors’ holdings are accurate and updated.
Are these regulations even needed?
As per the aforementioned report, business operators are to follow the additional regulations mentioned above until the end of September.
Thailand has witnessed an immense surge in crypto-adoption lately. According to data compiled by the Thai SEC, the combined volume across licensed Thai crypto-exchanges rose from $574.5 million in November (2020) to $3.96 billion in April of this year. That is an almost 600% rise.
The country’s regulatory watchdogs have actively been implementing crypto-related regulations in the said region. Earlier this year, it even proposed to impose a $32,000 minimum annual income requirement for investing in cryptocurrencies like Bitcoin.