Thailand set to reform crypto rules after market rout

After Zipmex’s implosion, regulators in Thailand have apparently had enough and want to revamp the laws governing the country’s cryptocurrency industry.

Arkhom Termpittayapaisith, Thailand’s finance minister, revealed the government’s plans to overhaul the laws in charge of the country’s digital asset ecosystem. The plan involves giving greater powers to the country’s central bank.

Currently, the Securities and Exchange Commission (SEC) is the main body responsible for overseeing the industry, but a proposed change would see the central bank take the lead instead.

“Right now, the central bank does not have room to enter the regulatory framework except to notify that crypto is not a legal means of payment for goods and services,” Arkhom said. “So the framework is not clear enough to regulate the industry.”

Sethaput Suthiwartnarueput, the Bank of Thailand’s governor, expressed optimism about the change, saying the regulator will draw “red lines” on cryptocurrencies as it moves towards a central bank digital currency (CBDC) launch.

Thailand has divided opinions on crypto

The country’s overall stance on cryptocurrencies has been inconsistent, with a blanket ban on the asset class proposed at one point.

Several factors were responsible for the decision to bring the Bank of Thailand on board as a core regulator. The chilly crypto winter that saw traders lose over $2 trillion was one of the factors.

Another factor was the fall of lenders such as Celsius and the failure of entities such as Three Arrows Capital. Maters reached a climax when Zipmex, a local crypto exchange, suspended withdrawals for its customers, leaving thousands of investors stranded.

“We are trying to protect investors as well as keep the players in the industry on fair terms,” ​​Arkhom said. He cited the example of the stock exchange that has a high level of investment protection while digital assets have negligible protection “except for the consent that [investors] sat at the bottom.”

Investors are already scared

Recent events in the markets have negatively affected Thailand’s crypto traders. Bloomberg reported that the number of active trading accounts fell from 700,000 to 230,000 in less than six months.

On the other side of the divide, digital asset firms are also showing signs of desperation to appear profitable. In June, the SEC fined Bitkub, a local exchange, for framing “artificial trading volumes” as transaction volumes across the board.

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