The Securities and Exchange Commission (SEC) of Thailand is reportedly preparing to protect investors from the risks of lending services as it issues new regulations for companies that provide services related to crypto assets.
Crypto Service Providers Need to Issue Warnings
As per the new regulations which will possibly be effective from July 31, 2023, digital asset service providers are required to issue proper warnings outlining dangers related to cryptocurrency trading.
Each of them are required to show the following message: “Cryptocurrencies are high risk. Please study and understand the risks of cryptocurrencies thoroughly, because you may lose the entire investment amount.”
Service Providers Forbidden from Lending with Customer Funds
The warning statement must be readily visible, and before clients can use the service, the company’s management needs to make arrangements for them to provide permission while accepting the dangers. In addition to the warning about trading risks, the new guidelines forbid service providers from lending or investing with consumer funds.
First Meeting on New Investor Protection Rules
Notably, the first meeting on new investor protection rules was held on September 1, 2022, when the SEC agreed to a mandate for crypto business owners to disclose the dangers of trading cryptocurrencies.
Meanwhile, the meetings on December 1, 2022, and May 11, 2023, respectively, covered the regulations preventing operators of digital asset businesses from offering services or facilitating deposit-taking and lending activities.
Thailand Tightens Regulations on Crypto
The Thai SEC issued this notification following a number of earlier regulatory measures directed at the market for digital assets. Last year, it announced plans to forbid the usage of virtual currencies in the country for publicly funded purchases of goods and services.
However, at the beginning of this year, the Bank of Thailand declared its intentions to permit virtual banks to conduct business in Thailand for the first time. The launch of Thailand’s digital money has also been announced. To do this, the Bank of Thailand is working with the Bank of Ayudhya and Siam Commercial Bank.