New setback for the crypto sector in Thailand, the country’s regulator, the Securities and Exchange Commission (SEC), suggests banning companies from offering staking and lending services.
In its statement, the Thai SEC justifies its decision in order to “protect traders and the public from risky trading service providers.”
Ban on advertising crypto exchanges like Binance
The Thai state was among those who started the road to the crypto sector. Many professionals and investors are based there. Unfortunately, we have to admit that the policy makers are taking a completely different turn in this year 2022: after introducing a new, stricter tax framework, they have banned payments in cryptocurrencies for the purchase of goods and services.
In other words, the Thai government considers crypto-currencies too risky and wants to completely overhaul the current regulations in order to make them less flexible, and therefore less favorable.
Last week, the Thai administration also mentioned the case of several crypto platforms that found themselves unable to return their users’ funds. Words that make illusion to the bankruptcy of the platforms Celsius and Voyager Digital, not to mention other struggling crypto companies such as Vauld, Babel Finance, CoinFLEX, or Blockchain.com.
According to the SEC in its meeting No. 12/2022 on September 1, 2022, the resolution approved the principle of prescribing rules prohibiting digital asset trading operators from providing or supporting digital asset depository services with the payment of returns to depositors and lending (deposit and lending) :
- To protect traders and the general public from the risks of these transaction providers as well as
- to help reduce problems that may be misinterpreted as a service regulated by a regulatory authority.
And right now, many foreign service providers are facing liquidity problems and have to stop providing services and suspend customers’ digital asset withdrawals,” the Thai SEC announcement reads.
As for foreign crypto exchanges such as Binance or Kraken, with which Thai people can register, the SEC says they are prohibited from advertising, soliciting the general public or doing any other act in a way that supports deposit and lending services.
For the time being, the SEC’s ideas are only proposals, without any binding value. The SEC is seeking public comment on the ideas. This consultation will end on October 17. However, around the world, pressure from regulators is growing, particularly in Asia . For example, the crypto exchange Huobi has just delisted many anonymous cryptocurrencies such as Monero (XMR), Dash (DASH), Firo (FIRO) and many others, in order to avoid any problems with regulators.
