Thailand tightens crypto advertising rules after Crypto Zipmex goes bankrupt
Thailand’s Securities & Exchange Commission (SEC) announced on Thursday that it has tightened cryptocurrency firms’ advertising rules.
In an email sent on Thursday, the SEC told various crypto-related companies operating in the country that advertisements for digital assets must include 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.
The regulator’s details on the tighter regulations on crypto advertising include:
· Advertisements must not contain false, misleading or exaggerated claims
· Warnings about risks must be clear and easy to notice
· The advertisements must contain balanced views, and mention both positive and negative factors
· And crypto firms must limit advertising to official channels such as their websites
Recently, the authorities announced their plans to provide more protection for retail investors.
The enforcement of the new advertising rules by the SEC comes after Zipmex, a locally licensed crypto exchange, and its regional parent, Singapore-headquartered Zipmex Pte, halted withdrawals in July due to a liquidity crisis following their exposure to troubled Babel Finance, and Celsius Networks went sour.
Zipmex, a crypto exchange operating in markets such as Singapore and Thailand, halted withdrawals as the fallout from a series of defaults spread further into the industry.
The second largest digital asset exchange in Thailand has been fined $1.92 baht by the local regulator, according to the statement published on the Security and Exchange Commission, due to non-compliance with the standards of professional ethics during the shutdown in Julyunder Royal Decree on Trade in Digital Assets 2018.
The Asian platform faced financial difficulties stemming from trading with troubled crypto lending firms Babel Finance and Celsius Network Ltd.
Zipmex ran into financial trouble due to its $48 million exposure to Babel and $5 million exposure to Celsius.
Work to improve consumer protection
The latest move by Thailand sees it join countries such as Britain and Singapore in protecting retail investors in the wake of a $2 trillion sell-off in digital asset markets.
In January, the UK government strengthened rules on cryptocurrency ads to bring them in line with other financial assets.
The UK financial watchdog, the Financial Conduct Authority (FCA), said the rules would increase consumer protection and also encourage innovation.
In March last year, the UK Advertising Standards Authority (ASA) banned what it called a “socially irresponsible” Bitcoin ad and issued warnings to a group of crypto firms about crypto promotions.
In January this year, the regulator banned two ads from Crypto.com, saying the firm encouraged people to buy Bitcoin with credit cards.
Meanwhile, in January, Singapore’s financial regulator, the Monetary Authority of Singapore, restricted digital asset players from promoting crypto services in public spaces, leading to the removal of advertisements in MRT stations and the dismantling of Bitcoin ATMs.
The regulator is now considering further measures to discourage retail investors from accessing crypto.
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