In November 2022, the SEC published a consultation paper on the proposed amendment to capital requirements for digital asset business operators which includes paid-up and ongoing capital as well as other related criteria. Subsequently, the SEC took into consideration the comments and suggestions from the private sector and proposed a revision to such principles, which was later approved by the SEC Board.

Therefore, the SEC is now open for public comments on the draft regulation on capital requirement and other relevant documents. Key points are summarized as follows:

  (1) Adjustments to the paid-up registered capital of digital asset exchanges, brokers and dealers;

  (2) Revision of the Net Capital (NC) rules as follows:

  (a) Minimum NC requirement : a minimum value of 25 million baht for business operators that hold customer assets and 5 million baht for business operators that do not hold customer assets;

  (b) The capital from digital asset operation : NC charge of clients’ assets stored in hot wallet shall vary based on the proportion stored in hot wallet. NC charge of clients’ assets stored in cold wallet shall be based on where assets are stored. Furthermore, additional capital charges shall be imposed to support the risks associated with providing digital asset trading services.

  (3) Amendments to digital assets custody criteria, allowing business operators holding clients’ digital assets of no more than 1 billion baht to be able to store such assets in hot wallet up to 50 percent;

  (4) Revision of the criteria for digital asset businesses’ suspension: When business operators’ net capital falls below the minimum requirement level, company must submit notification outlining cause and corrective plan to the SEC within 15 days as well as make  necessary corrections within the notified timeframe, not exceeding 45 days, while refrain from performing further actions as directed by the SEC. If business operators fail to submit such notification or complete the corrections within the specified timeframe, or if the net capital falls below 60 percent of the minimum requirement for five consecutive days, digital asset operations must be suspended. Business operator must notify customers and follow procedures as directed by the SEC to rectify the situation;

(5) Amendments to other relevant rules and net capital reporting forms which include:

(a) Use of insurance policies or similar type of clients’ digital assets to offset net capital required;

(b) Specified details for added clarity on use of insurance policies;

(c) Revocation of the provision concerning capital requirements for business operators engaged in cosign* custody arrangements;

(d) Adjustment to the early warning level for business operators;

(e) Revision of the net capital reporting forms and submission, aligning with the updated regulations**.

For further details of this public hearing, please visit https://www.sec.or.th/TH/Pages/PB_Detail.aspx?SECID=977 or https://law.go.th/. We welcome stakeholders’ and interested parties’ comments and recommendations via the SEC Thailand’s website or email: phireeyaphon@sec.or.th or pitchal@sec.or.th. The Public hearing ends on 21 March 2024.

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Notes:

* The client's assets are kept in custody but cannot be accessed or transferred without the client's case-by-case consent (the client and the business operator share the private key for such asset transfers and the client must cosign with the business operator).

** Including Form Dor Jor 1, Form Dor Jor 1/1, and Form Dor Jor 2, along with explanatory notes for these reports in line with the amended criteria. Form Dor. Jor. 3 for reporting of shareholders’ equity is discontinued.