Thai regulators are making moves to tighten crypto rules

Thailand’s regulators have introduced tighter rules for digital assets due to trading irregularities and the fall of a peak acquisition involving a crypto exchange.

This move has influenced Thailand’s mission to become the top trading hub for digital assets in Southeast Asia.

Cryptocurrencies in Thailand gained increased popularity after the country became the first in the region to implement digital asset legislation in 2018. Following this, the country’s Securities and Exchange Commission licensed six platforms as exchanges, including Bitkub Capital Group Holdings Co. and Zipmex Thailand.

However, confidence in the local crypto market has come under scrutiny following a recent insider trading case by a Bitkub executive, who was later fined 8.5 million baht ($233,459) by the SEC, and a police complaint earlier this week against Zipmex and its. The CEO also added to the doubt of crypto.

Thailand’s local cryptocurrency instability has been exacerbated by the global crypto rout.

According to Bloomberg, “The tighter controls, experts said, have amplified the blows from outside Thailand: the plunge in BitcoinEther and other tokens, as well as meltdowns of crypto lender Celsius Network Ltd., broker Voyager Digital Ltd. and hedge fund Three Arrows Capital.”

The SEC plans to improve its oversight of digital assets to improve investor protection through a task force.

“Most investors and market participants are extremely deflated with negative headlines almost every day,” said Nares Laopannarai, secretary general of the Thai Digital Asset Association. “Increasing regulatory risks will make it more difficult to restore tension in the market, which has already been hit by weakened global sentiment.”

The country’s SEC has also announced on September 1 the tightening of cryptocurrency firms’ advertising rules, Blockchain.News reported.

In an email, the SEC told various crypto-related companies operating in the country that advertisements for digital assets must contain clear and visible warnings about the risks of investing in cryptocurrencies.

The SEC tightened the rules after discovering that some ads contain no warnings about crypto risks, while other campaigns contain only positive information.

According to a report from Bloomberg, active trading accounts in the country fell to 246,000 in August – which is a third of the figures in January.

Last month, SCB X Pcl canceled its 18 billion baht plan to buy a majority stake in Bitkub Online. The financial group, whose main shareholder is Thailand’s royal family, said the exchange operator’s ongoing problems with regulators were the reason behind the cancellation.

“The collapse in digital asset prices has wiped out a huge amount of wealth among Thai investors,” said Karin Boonlertvanich, executive vice president of Kasikornbank Pcl. “The recognition of bubble price risk will scare these people for quite some time to come.”

According to data from the SEC, the country witnessed a decline in cryptocurrency trading on licensed exchanges to 64 million baht in August – a figure that has been declining since December 2020.

However, some companies have continued to believe in cryptocurrencies. Companies such as Thailand’s largest private power producer, Gulf Energy Development Pcl, continue to bet on the growth of the crypto market as their plans to expand into digital asset businesses to diversify earnings have doubled. The company, controlled by Thailand’s second-richest person, Sarath Ratanavadi, is seeking licenses from the SEC to operate a digital asset exchange and brokerage business in partnership with Binance Holdings Ltd.

“We are confident in the potential of cryptocurrencies and digital assets as the world moves further and further into blockchain technology and related ecosystems,” Yupapin Wangviwat, Gulf Energy’s chief financial officer, said in an interview last month. “Tokens with underlying assets will complement the transformations of most companies.”

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