Thai Tightens Investor Protection Bans Customer Crypto Usage
TL;DR In May 2023, the Securities and Exchange Commission (SEC) of Thailand approved new rules that require digital asset business operators to obtain pre-approved promotional activities before being able to offer deposit-taking and lending services. These regulations also prohibit any attempts to advertise deposit-taking and lending services to the general public, even if offered by entities other than digital asset business operators. Investors are advised to exercise due diligence and carefully examine the newly introduced framework.
By implementing this proactive measure, individuals are equipped with comprehensive information before engaging in cryptocurrency transactions.
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Clients are required to undergo a meticulous investment suitability assessment, carefully consider appropriate investment proportions, and provide their consent while fully acknowledging the potential risks involved.
This significant action ensures that individuals are well-informed and prepared before entering the realm of cryptocurrencies.
SEC-Approved Promotional Activities Required For Crypto Deposit Returns
Following extensive discussions during crucial meetings held in September and December 2022, a significant decision was reached to endorse these rules.
The rules were officially approved in May 2023, marking a milestone in their implementation. Discussions regarding the rules that prohibit digital asset business operators from offering services or facilitating deposit-taking and lending services took place during meetings held from December 1, 2022, and May 11, 2023.
Starting from August 30, digital asset deposits will only be eligible for returns if they are part of pre-approved promotional activities specified by the SEC.
In addition, the regulations firmly prohibit any attempts to promote or advertise deposit-taking and lending services to the general public, even if offered by entities other than digital asset business operators.
During the bear market, a substantial number of crypto lending companies, which had amassed billions in customer deposits by offering high returns, faced financial collapse. Prominent lending firms such as Celsius and BlockFi filed for bankruptcy, leading to investor funds becoming entangled in bankruptcy proceedings.
Both investors and individuals are strongly advised to exercise due diligence and carefully examine the newly introduced framework by the SEC.
By gaining a thorough understanding of the associated risks and adhering to the regulatory guidelines, investors can make well-informed decisions and protect their interests confidently.
Thailand has taken a prudent step towards bolstering investor protection, joining global efforts to effectively regulate the expanding cryptocurrency market.