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SEC reveals guidelines to regulate digital assets

Friday 8 June 2018 | No. 60 / 2018

Bangkok, 8 June 2018 - On June 7 2018, SEC Board has approved the regulatory framework of initial coin offering (ICO), and operations of digital asset exchanges, brokers and dealers. The regulations are expected to issue within this June.

The proposed guidelines have received public comments from several channels spanning from website, social media to focus groups.

The to-be-issued rules will provide regulatory clarity for ICO issuers, related intermediaries and those who transact with digital assets, and lessen chance for people on deception or be at disadvantages as well as allow the public sector to have tools to monitor and deter money laundering.

ICO issuers must be a company established under Thai law, with a clear business plan, audited financial statements, clear rights for digital token holders, source code disclosure, a prospectus, progress reports of a project and use of proceeds.

The offering of digital token must be made through ICO portals approved by SEC Board. The role of ICO portal is to perform due diligence on the projects, verify investors’ identities and status, and conduct risk assessment of investors.

Issuing of each ICO can be offered the unlimited amount to institutional investors, ultra-high net worth investors and venture capital enterprises, but no more than 300,000 baht to each individual investor. A combined amount sold to individual investors must be no more than four times of shareholders’ equity or no more than 70% of total amount offered.   

Digital asset exchanges, brokers and dealers must be granted licenses from the minister and their paid-up capital must be no lower than SEC requirements. Digital assets which will be traded in exchanges are required to follow the listing rule of exchanges which must be approved by SEC Board.

Any digital asset trading within the digital asset exchanges must be exchanged with baht or cryptocurrencies listed on the notification.

SEC Board has also approved the exemption on the offering of utility token that is ready to use at the day of offering from ICO regulation.

Also, providers who service trading utility tokens with similar rights including coins in games or points to redeem for products or services are not regarded as operating digital assets businesses. For providers who service trading digital assets with Thai baht pegged stable coin are not regarded as operating digital asset brokers and dealers under this royal decree.

SEC Deputy Secretary-General Tipsuda Thavaramorn said “Based on the regulation, we try to strike the balance between fostering innovation and building confidence to the relevant parties. Comments from all parties have been taken into consideration. The regulation may not be perfect yet, but it’s the start allowing us to learn from the real use case together with the industry.


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