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SEC Board approves rules governing digital asset exchanges regarding service provision related to utility tokens and certain types of cryptocurrencies



Saturday 12 June 2021 | No. 114 / 2021


Bangkok, 11 June 2021 – The Securities and Exchange Commission (SEC) Board has approved the new rules that prohibit digital asset exchanges from providing services in relation to utility tokens and certain types of cryptocurrencies. The rules also specify that the exchanges set a requirement to be imposed in the event that digital tokens issued by their own exchange or related persons are listed on the exchange. In this regard, the token issuer who fails to comply with the white paper and relevant rules in substance could risk having such tokens delisted from the exchange. This new regulatory guideline aims to enhance protection of digital asset traders’ interest.

SEC Secretary-General Ruenvadee Suwanmongkol stated that the SEC Board Meeting No. 12/2564 held on 9 June 2021 had passed a resolution approving 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). After publication in the Government Gazette, the Notification has become effective from 11 June 2021 onwards without retrospective effect. Essentially, the Notification prescribes that digital asset exchanges set their listing rules and prohibits the exchanges from providing services related to utility tokens or cryptocurrencies that have any of the following characteristics: 

   (1)  Meme token: having no clear objective or substance or underlying, and whose price running on social media trends;

   (2)  Fan token: tokenized by the fame of influencers;

   (3)  Non-fungible token (NFT): a digital creation to declare ownership or grant of right in an object or specific right. It is unique and not interchangeable with digital tokens of the same category and type at the equal amount;
   (4)  Digital tokens which are utilized in a blockchain transaction and issued by digital asset exchanges or related persons.            

In addition, a digital asset exchange has to set the requirement that the digital token issuer who is the exchange itself or related person comply with the white paper and relevant rules in substance. Failure to do so could result in the delisting of such digital token from the exchange. 

The exchanges are required to comply and revise their listing rules in accordance with the Notification within 30 days from the effective date thereof.
 

Interested investors are strongly advised to study carefully and thoroughly before making a decision to trade digital assets. More information on the topic “digital assets” is available at
www.sec.or.th. Name lists and information on all approved products or licensed business operators are available on SEC Check First application. For further inquiries or whistleblowing, please contact SEC Public Service Center at Hotline 1207 or via online channels such as SEC Facebook Page and SEC Live Chat at the SEC website, 24 hours/day, 7 days/week.

 

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