- Thailand SEC solidifies their interest in protecting Investors through the new regulation.
- A ban has been placed on crypto exchanges to refrain from offering lending or staking services.
- Singapore takes a similar step too.
Thailand’s Crypto Watchdog Bans Lending Services
Thailand announced a ban on crypto exchanges offering lending services. The Southeast Asian country is the second country to place a ban on crypto exchange this week. Singapore also announced new regulations and restrictions on exchange operators.
Cryptocurrency regulators have been taking more decisive steps in regulating the crypto industry.
Despite the crypto regulations enforced by Thailand SEC, the Southeastern country ranks 8th regarding global adoption.
The new crypto regulations announced by Thailand Securities and Exchange Commission intend to solidify the country’s policy in protecting investors’ interests.
According to the press document released today, Thailand SEC requires crypto exchanges to disclose the risk of investing in crypto through the words below,
“Cryptocurrencies are high risk. Please study and understand the risks of cryptocurrencies thoroughly. Because you may lose the entire amount invested.”
This is provided in the points shared on the Thailand SEC’s website.
Thailand’s SEC says, “The warning message must be visible. Along with the notification of the investment suitability assessment results and allocation and determination of the appropriate investment proportion (basic asset allocation) before customers use the service, and the business operator must arrange for the service users to give consent to acknowledge such risks before using the service.”
The rules imposed a responsibility upon crypto exchanges to ensure that customers consent to cryptocurrency trading risks. This is important as the regulations are centred on protecting the interest of customers. The new rules will take effect on the 31st of July.
Thailand Regulations and the Protection of Investors’ Interests
While these new rules are introduced at a sensitive period where the crypto industry faces regulatory challenges, Thailand has been vocal about its strict oversight of the crypto space.
Last September, the crypto watchdog released some regulations over crypto advertising. Following the regulations, crypto exchanges were mandated to show investment risks and share their data on advertising projects. These regulations were implemented to prevent investors from losing all their funds.
In 2022, Thailand’s SEC also banned using cryptocurrency as a means of payment. According to the regulator’s statement,
“[Crypto payments] may affect the stability of the financial system and overall economic system, including risks to people and businesses.”
The Securities and Exchange Commission of Thailand had growing concerns about crypto being a tool to launder money. The combination of these concerns led to the ban on crypto as a means of payment. However, Thailand’s SEC allowed its citizens to engage in crypto trading.
In June 2022, Thailand authorities proposed a 15% capital gains tax on cryptocurrency profits, but the proposal was vehemently opposed. The Chairman of the Federation of the Capital Market Federation opposed the proposal. He stated that the proposal’s effect would result in a lower liquidity rate in the market and may deter foreign investors from trading.
The warning from the Chairman of the Federation of the Capital Market, coupled with the intense backlash the government faced, caused the proposal to be scrapped.
