The Thailand Securities and Exchanges Commission announced new regulations for the cryptocurrency industry that are expected to take effect later this month. The new regulations stipulate a defined number of market intermediaries who will receive trading licenses, with crypto exchanges and brokerage firms getting an equal number of spots.
The commission also cleared 7 cryptocurrencies which will be allowed to be traded as trading pairs by market participants. The move is expected to bring order and supervision to an industry whose volatility and lack of regulations have been some of its most renowned qualities.
Comprehensive Regulations Address Key Issues
The guidelines released by the commission are quite thorough, with the Bangkok Post reporting that the market participants will have until August 14 to apply for licenses under the new framework. To begin with, the commission expects 10 intermediaries to apply for licenses, with half the spots being reserved for crypto exchanges while the other half is given to brokerage firms and dealers.
The commission also listed seven cryptocurrencies that it will allow for trading. They are Bitcoin, Ethereum, Ethereum Classic, Bitcoin Cash, Ripple, Stellar and Litecoin. These currencies will be used as trading pairs for ICOs. The publication reports that the commission considered the cryptocurrency liquidity and the consensus credibility to list the coins.
The commission will oversee all crypto market participants, including brokerage firms, dealers, crypto exchanges and ICO issuers. These participants will be required to register with the regulator within 90 days of the effective date. In order to receive the approval, one must share important information pertaining to the digital asset on offer with the targeted investors. The issuer must also seek the approval of the Ministry of Finance before beginning operations.
The regulator also imposed tough punitive measures for anyone who goes against the new laws. Any ICO issuer who is found guilty of selling unauthorized digital assets will face a fine of at most twice the value of the transactions or a minimum of 500,000 baht ($15,650). The culprit also stands the possibility of a maximum of two years imprisonment.
ICOs issuers can either seek investment from institutional or retail investors, with the guidelines for each target group differing significantly. With institutional investors, the ICO issuer can raise an unlimited amount of investment. However, the maximum amount one can raise from retail investors is capped at 300,000 baht ($9,390) per person.
The guidelines also delved into the licensing fees, with crypto exchanges being required to pay 5 million baht ($156,500). Brokerage firms are required to pay 2.5 million baht while dealers have to pay 2 million baht. The participants also have to pay an annual fee to the Finance Ministry. Crypto exchanges are charged 0.002% of the trading volume with a minimum fee of 500,000 baht ($15,650) while brokerage firms part with 0.001% of their trading volume with the minimum standing at 250,000 baht ($7800). Centralized exchanges must have 50 million baht ($1,560,000) as their registered capital with decentralized exchanges being required to put up 10 million baht ($313,000).
This is a landmark move for the crypto industry in Thailand, a country that has embraced the blockchain fully especially in the financial services industry. The Bank of Thailand, the country’s financial industry regulator has encouraged the exploration of the blockchain by financial institutions to increase efficiency, reduce costs and enhance transparency. The BoT governor recently revealed that the regulator is looking at supporting CBDCs for back office settlements before rolling them out for mainstream use.