Thailand plans to change regulations governing crypto-assets
Thailand’s crypto regulation is under scrutiny as the government plans to change the rules for digital assets.
The country’s regulators said action must be taken as a recent sell-off in cryptocurrency saddled retail investors with heavy losses and brought down several companies.
Existing digital asset regulations in Thailand were introduced in 2018; however, they require changes from the Securities & Exchange Commission (SEC), said Secretary General Ruenvadee Suwanmongkol.
Suwanmongkol added that stricter qualifications for managing and licensing crypto-custodians would be part of the amendment. Specific details have not yet been released.
“The extreme volatility in digital asset prices has spurred the urgent need for improved oversight,” Ruenvadee said in an interview. “Our main focus will be to provide more protection for small investors, some of whom put most of their savings into these assets.”
The regulator was motivated to take action after Zipmex (Thailand) Ltd., one of the country’s licensed cryptocurrency exchanges, and its regional parent halted withdrawals this week, according to Bloomberg.
The company faces a liquidity crunch is similar to the bankruptcy of Celsius Network Ltd. and Three Arrows Capital.
According to Bloomberg, CEO Akalarp Yimwilai said Wednesday that Zipmex (Thailand) is talking to potential investors to raise funds for a “rescue package.” On its Facebook page Thursday, the company announced it has $48 million in exposure with Babel and $5 million with Celsius.
Zipmex Thailand’s problems are an individual case stemming from problems in a related business, Ruenvadee said.
Another crypto scandal that has led to regulatory tightening is a case involving “artificial trading volume” by Thailand’s largest crypto exchange, Bitkub Online Co., and its CEO Sakolkorn Sakavee, who was later fined.
Bitkub claims that it continues to operate normally and allows withdrawals and deposits of all assets under its guidelines.
According to data from the Thai SEC, cryptocurrency trading in June on Thailand’s licensed exchanges fell to the lowest since January 2021 when it fell to 58 billion baht ($1.6 billion).
The data also showed that the total number of active trading accounts fell to 305,000 in June, from 556,000 in May.
Thailand’s crypto regulation is as volatile as the crypto industry.
While in April, a report from Reuters tired Thailand’s market regulator had announced that the use of numerical values to pay for goods and services would be banned from April 1.
Blockchain.News reported that the new rule was issued following an earlier discussion between the Securities and Exchange Commission (SEC) and the Bank of Thailand (BOT). The SEC said the debate stated the need to regulate such activity by digital asset operators as it could undermine and affect Thailand’s financial stability and the overall economy.
The report added that the SEC also announced that the new rules must be complied with by businesses offering such crypto services within 30 days from the effective date.
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