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Thai SEC Canvasses Opinion on Proposed Crypto Staking and Lending Ban

2 mins
Updated by Geraint Price
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In Brief

  • Thailand’s Security and Exchange Commission said it is welcoming opinions after approving rules restricting the operation of digital asset service providers.
  • The regulations were passed on Sept. 1, which also included a ban on cryptocurrency advertisement and promotion.
  • The authority said it was introducing the restrictions to protect the public from crypto services provider risks, like recent example Zipmex.
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The Thai Securities and Exchange Commission (SEC) has approved regulations prohibiting digital asset operators from providing or supporting digital asset deposit services that pay returns to depositors.

In the announcement on its website, the SEC also said it would be welcoming opinions on the principle, which it said it enacted at a meeting on Sept. 1 in order to protect traders and the public from the business risks posed by the service providers.

Thai crypto prohibitions

The official prohibition notice posted on the financial regulator’s website outlined three clauses. First, digital asset business operators are prohibited from taking deposits of digital assets, or depositing digital assets for loans or investments, and paying returns to depositors.

The prohibition also extends to depositors accepting digital assets as return payment. 

The third clause also precludes any advertising or soliciting of cryptocurrencies to the general public, “or doing any other act in the manner of supporting the deposit taking and lending services.”

This would include anything that facilitated what was banned by the first pair of stipulations, such as using alternative channels, like foreign deposit taking and lending service providers available through the operator’s platform or application.

With the prohibition, the regulator explained that it wanted to clarify that digital assets are not regulated by any authority, and that this lack of both domestic and foreign supervision “may lead to damage.”

It continued, “at present, there are many foreign service providers who face liquidity problems that have to stop their services and suspend the withdrawal of digital assets of customers.”

Zipmex issues

One such troubled exchange that was forced to halt withdrawals is Zipmex, which has operated in Singapore, Indonesia, Australia, in addition to Thailand.

When the exchange neglected to produce transactional information before a deadline, the SEC filed a police complaint against Zipmex last week. The regulator also requested clarity from Zipmex over a withdrawal freeze in July.

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Nicholas Pongratz
Nick is a data scientist who teaches economics and communication in Budapest, Hungary, where he received a BA in Political Science and Economics and an MSc in Business Analytics from CEU. He has been writing about cryptocurrency and blockchain technology since 2018, and is intrigued by its potential economic and political usage.
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