Thailand’s Securities and Exchange Commission (SEC) has recently implemented regulations targeting crypto service providers with an increased focus on safeguarding investors. Following the crypto lending crisis, which led to the bankruptcy of notable firms, discussions on investor protection regulations have been ongoing since September 2022.
These guidelines will include clear risk warnings and essential restrictions on deposit and lending services provided by digital asset businesses. All digital asset platforms are required to give a disclaimer to this effect.
To ensure visibility and user awareness, the warning message must be prominently displayed, and the business operator must obtain the users’ consent and acknowledgment of the risks before they can access the service.
The message to be displayed states:
Cryptocurrencies are high risk. Please study and understand the risks of cryptocurrencies thoroughly, because you may lose the entire investment amount.
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.
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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.
