- Thailand’s SEC introduces regulations prioritizing investor protection in digital asset services.
- Clear risk warnings are mandated for cryptocurrency traders, noting the potential loss of investment.
- Restrictions are imposed on deposit and lending services by digital asset businesses, with limited exceptions.
Thailand’s Securities and Exchange Commission (SEC) introduced new regulations for digital asset service providers to prioritize investor protection and the guidelines now mandate clear risk warnings for cryptocurrency trading.
Reporter Collin Wu took to Twitter to share the new announcement:
The Thai government requires that cryptocurrency exchanges and others must publicly disclose the risks that may arise from trading cryptocurrencies; it is prohibited to provide digital assets deposited by users for loans or investments, and to pay depositors returns, and related…— Wu Blockchain (@WuBlockchain) July 3, 2023
Under the new regulations, digital asset providers must include a clear warning about the potential risks involved in trading digital assets.
The Thai SEC noted that the warning message must be prominently displayed along with the disclosure of investment suitability assessment results and appropriate asset allocation. Service providers are also required to ensure users give consent and acknowledge the risks before utilizing their services, as per the guidelines.
In addition to risk disclosure, the new guidelines impose limitations on deposit and lending services offered by digital asset businesses. Starting from August 30, these rules prohibit the provision or support of such services, except for specific pre-approved promotional activities.
Any attempts to advertise or influence deposit-taking and lending services, even by entities other than digital asset businesses, are strictly prohibited as stated in the Thai SEC’s guidelines.
The dialogue on investor protection regulations was initiated on September 1, 2022, with the Thai SEC endorsing the requirement for cryptocurrency business operators to disclose security warnings about the risks of trading cryptocurrencies.
Subsequently, discussions on rules prohibiting digital asset business operators from offering deposit-taking and lending services were held on December 1, 2022, and May 11, 2023.
With the global surge in popularity of digital assets, regulatory authorities are taking proactive steps to address risks and maintain the integrity of the financial system. In January, Thailand’s SEC did issue new regulations for crypto custodians which required companies operating in the digital asset space to establish a digital wallet management system.
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