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SEC reiterates prohibition on meme token services by digital asset exchanges and warns digital asset brokers against misleading investors



Tuesday 7 May 2024 | No. 95 / 2024


Bangkok, 7 May 2024 – Pursuant to the current rules for undertaking digital asset businesses, digital asset exchanges are prohibited from listing meme tokens to maintain orderliness in digital asset trading and protect investors against unfair activities as well as mitigate the risk of price manipulation as meme tokens lack fundamental factors and rely on individual preferences.

However, the rules do not prohibit digital asset brokers from providing meme token services to clients on the condition that they must act as broker or agent in trading and exchanging digital assets for clients, and must ensure that clients receive the best execution terms from various sourced exchanges to which the brokers have linkage.   

The SEC reiterates that any entity holding both digital asset exchange and brokerage licenses intending to offer meme token trading services must send such trading orders to sourced exchanges solely in their capacity as broker, without misleading the general public into believing that the orders are serviced by digital asset exchange. Moreover, influencers and trading partners must also adhere to this principle. 

The SEC rules aim to protect investors, maintain market integrity, and support financial innovations suitable for each type of digital asset business, without imposing undue burdens on businesses. 

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Note: 

Meme token refers to digital tokens without clear objectives or utility, lacking underlying support, with prices driven by trends in social media. The prohibition of digital asset exchanges from trading meme tokens is in compliance with the Notification of the Securities and Exchange Commission No. Kor Thor. 18/2564 Re: Rules, Conditions and Procedures for Undertaking Digital Asset Businesses (No. 11), dated 10 June 2021.





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Building Confidence in the Capital Market
NEWS
Securities and Exchange Commission
Corporate Communication and Investor Service Department
Tel. (66)2033-9502-5 E-mail: press@sec.or.th
No. 95 / 2024 Tuesday 7 May 2024
SEC reiterates prohibition on meme token services by digital asset exchanges and warns digital asset brokers against misleading investors

Bangkok, 7 May 2024 – Pursuant to the current rules for undertaking digital asset businesses, digital asset exchanges are prohibited from listing meme tokens to maintain orderliness in digital asset trading and protect investors against unfair activities as well as mitigate the risk of price manipulation as meme tokens lack fundamental factors and rely on individual preferences.

However, the rules do not prohibit digital asset brokers from providing meme token services to clients on the condition that they must act as broker or agent in trading and exchanging digital assets for clients, and must ensure that clients receive the best execution terms from various sourced exchanges to which the brokers have linkage.   

The SEC reiterates that any entity holding both digital asset exchange and brokerage licenses intending to offer meme token trading services must send such trading orders to sourced exchanges solely in their capacity as broker, without misleading the general public into believing that the orders are serviced by digital asset exchange. Moreover, influencers and trading partners must also adhere to this principle. 

The SEC rules aim to protect investors, maintain market integrity, and support financial innovations suitable for each type of digital asset business, without imposing undue burdens on businesses. 

__________________

Note: 

Meme token refers to digital tokens without clear objectives or utility, lacking underlying support, with prices driven by trends in social media. The prohibition of digital asset exchanges from trading meme tokens is in compliance with the Notification of the Securities and Exchange Commission No. Kor Thor. 18/2564 Re: Rules, Conditions and Procedures for Undertaking Digital Asset Businesses (No. 11), dated 10 June 2021.