- Thai SEC releases regulations for providers of crypto custody services.
- The regulator requires policies and guidelines on the development of digital wallets and access keys as well as plans on risk management and contingency plans in case of threats.
- Thailand is attempting to safely embrace the crypto industry by creating awareness on crypto and digital assets through their newly launched academy.
Through a press release, Thailand’s Security and Exchange Commission (SEC) has rolled out regulations requiring crypto custody providers to implement a digital wallet management system to ensure the safety of their client’s assets.
The commission set three main requirements: custodians provide policies and guidelines for managing risks, digital wallets, and keys. They also required that the policies, course of action, and processes be made clear, along with internal control, to ensure that the guidelines are followed. The regulator also asked for the procedures for designing, establishing, and maintaining digital wallets and accessing keys securely.
Additionally, the custodians are required to have a contingency plan in the event of a threat against proper management of the wallets and keys adding,
“This includes laying out and testing action procedures, designating responsible persons, and reporting the event.”
SEC also stated:
“An audit of system security is also required as well as digital forensic investigation in case of any event affecting the security of systems related to digital asset custody, which could cause significant impacts on clients’ assets.”
All these regulations have been in effect since the 16th of January, 2023, and crypto custodians must fully comply within the next six months.
Thailand on a journey to a safe crypto industry
In September last year, Thailand’s SEC took the drastic measure of banning crypto firms from offering staking and lending services. In a press release, they stated that their aim was “to protect traders and the general public from the risks of such transaction providers.” This was after crypto lender, Zipmex had frozen withdrawals earlier on in July, thus denying their clients access to their funds. The measure was also influenced by the aftermath of the FTX collapse that led to authorities and regulators worldwide tightening up rules on crypto operations to protect investors.
However, Thailand SEC seems to be on a journey to the safe adoption of crypto and digital assets in the Asian country. In addition to the regulations, SEC launched an online “SEC Crypto Academy” at the start of this year. The Academy cited as “A New Year Gift 2023 to the public,” is a platform for Thai to learn more about crypto assets and their risks. They would also learn how to identify and deflect fraud in the crypto industry.
The SEC launched this platform to prepare new investors, stating,” The Academy is a source of fundamental knowledge for newcomer investors to learn and prepare themselves before venturing into the digital asset world.” For a start, the Academy introduces digital assets, including blockchain, fundamentals of digital assets, the significant events and timelines in the crypto industry, and how to build an investment mindset and strategy.
