Thailand’s SEC Prohibits Utilising Customer Crypto Assets for Lending and Investment Purposes

SEC Regulations Aimed at Safeguarding Investors in Digital Asset Services

The Securities and Exchange Commission (SEC) of Thailand has issued regulations aimed at safeguarding investors in the area of digital asset services. The new regulations necessitate that digital asset service providers present enough warnings that emphasize the dangers related to cryptocurrency trading. All platforms must post a notification that states:

The business operator must ensure that the warning message is clearly visible and that customers give consent and acknowledge the risks before they can use the service.

In addition to a trading risks disclaimer, the new guidelines also forbid service providers from utilizing customers’ money for lending or investing.

Crypto Lending Crisis Leads to New Investor Protection Regulations

The Thai Securities and Exchange Commission (SEC) has put a stop to crypto lending services, thereby forbidding crypto platforms from giving any kind of gain on deposited crypto assets held by customers. The SEC’s goal is to enhance the protection of investors from the dangers of lending services. The new rules will be enforced beginning July 31, 2023.

The Thai SEC has accused crypto exchange Bitkub of wash trading.

The SEC’s approval of the requirement for cryptocurrency business operators to disclose the risks of trading cryptocurrencies on September 1, 2022 sparked a discussion on new regulations for investor protection. During meetings on December 1, 2022 and May 11, 2023, the rules prohibiting digital asset business operators from offering services or backing deposit-taking and lending services were discussed.

Following a major crypto lending crisis during the 2022 bear market, new investor protection regulations have been put in place. Several crypto lending companies, which had amassed billions in customer deposits by advertising high returns, went bankrupt during the bear market. Notable lending firms, including Celsius and BlockFi, declared bankruptcy, leading to investor funds being held up in bankruptcy proceedings.

The magazine “Bitcoin 2023 in Miami” addresses the issue of “shitcoins on Bitcoin”.