The Securities and Exchange Commission of Thailand has unveiled the details of the country’s regulatory framework for cryptocurrencies and initial coin offerings, including licensing requirements, fees, and a list of seven approved cryptocurrencies.
The Thai Securities and Exchange Commission (SEC) announced on Friday the details of the country’s cryptocurrency and initial coin offering (ICO) regulations. The measures were approved at the regulator’s June 7 meeting and are expected to go into effect later on this month, according to local media. “The proposed approach has been through public hearings in several channels,” MGR Online wrote.
According to SEC deputy secretary-general Tipsuda Thavaramara, the Commission’s regulatory scope includes ICOs, crypto exchanges, brokerage firms, dealers and other parties permitted by the Finance Ministry, the Bangkok Post reported, adding that initially:
The SEC will allow seven cryptocurrencies, used for initial coin offerings (ICOs), to be traded as trading pairs. They are bitcoin, ethereum, bitcoin cash, ethereum classic, litecoin, ripple, and stellar.
“Some of the main criteria used by the SEC to assess cryptocurrency trading pairs,” the news outlet detailed, are the “consensus credibility and cryptocurrency liquidity.” Thai Rath publication added that these seven cryptocurrencies are approved because they do not promote privacy.
According to the Bangkok Post, the SEC expects about 10 firms to apply for licenses, half of which will be crypto exchanges and the rest crypto brokers and dealers. Citing that crypto exchanges have until August 14 to apply for licenses, the news outlet elaborated:
All market participants, including ICO issuers, digital exchanges, brokers and dealers involved with digital asset transactions, are required to register with the SEC within 90 days of the effective date…The participants must also receive the Finance Ministry’s approval to conduct digital asset business.
Only registered companies in Thailand can apply for licenses, the Finance Ministry clarified. There is an upfront fee of 5 million baht (~US$156,194), “which is separated into 2.5 million each for token distribution and cryptocurrency operations,” the publication described. “Fees charged for brokerage firms and digital asset dealers are 2.5 million and 2 million baht, respectively.”
Annual Fees and Registered Capital
There are also annual fees: 0.002% of the total trading volume for crypto exchanges and 0.001% of the total trading volume for brokerage firms. The minimum fee for the former is 500,000 baht (~$15,619) and 250,000 baht (~$7,810) for the latter. The maximum fee is 20 million baht (~$624,775) for the former and 5 million baht (~$156,200) for the latter.
In addition, the publication wrote, “Registered capital for digital exchanges is stipulated at 50 million baht for a centralised exchange and 25 million for brokers, while a decentralised exchange is at 10 million and a decentralised broker is at 5 million.” However, the news outlet did not clarify how decentralized brokers and exchanges without a company associated with them would satisfy these requirements.
Furthermore, “Brokers solely involved with sending trading orders are required to have 1 million baht worth of registered capital, while dealers are required to have 5 million in registered capital,” the news outlet conveyed.
In order to receive approval from the SEC, token issuers “must state clearly the type of tokens being issued, as well as investment information,” the publication noted. ICO portals must have registered capital of at least 5 million baht (~$156,625) and are required to look after ICO offerings for at least a year.
There is no limit given to the amount of ICOs that can be offered to institutional and ultra-high-net-worth investors. However, “investment is capped at 300,000 baht for retail investors per person and per ICO project or no more than 70% of total value of offered tokens.”
According to the publication:
Sellers of unauthorised digital tokens and those setting up unauthorised seminars to solicit cryptocurrency investment will be fined no more than twice the value of the digital transaction or at least 500,000 baht [~$15,619.88]. They could also face a jail term of up to two years.
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Images courtesy of Shutterstock, MGR Online, and Thai SEC.
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