By Alicia Maher
As per recent reports, Thailand’s SEC is gearing up to stop crypto firms from offering lending and staking services to users. The press release stated that the agency is cracking down on these lending and staking firms following the fall of crypto lenders.
Thailand’s SEC To Combat Crypto Lending Services Following Recent Events
In 2022, several cryptocurrency lending firms collapsed. Hence, the Thai regulator is reportedly increasing its digital asset custodial services oversight.
In the past weeks, numerous regulators have issued warnings on DeFi platforms. They stated that many DeFi systems are on the brink of collapsing.
As a result, the watchdog has taken action to offer adequate protection for market participants. It also plans to reduce the dangers the crypto industry poses to the public.
The SEC argues that customers are in danger because of these untested and undiscovered technologies. Presently, the absence of proper regulation is giving room for fraudulent and illegal activities.
In addition, the watchdog is considering a new proposal. This proposal would make it illegal for crypto firms to “take deposits of digital assets and then use those assets to lend and invest in paying the depositors.”
Further, it intends to prohibit advertising or solicitation directed toward “the general public.” Consequently, it will ban adverts encouraging deposit-taking or lending services.
Crypto Regulation In Thailand
Recently, the nation released a series of new rules for crypto enterprises. Unfortunately, some guidelines have caused a severe outcry in the crypto community.
Also, the agency suggested guidelines that would control custody of digital assets held by cryptocurrency firms. These guidelines would ensure that these crypto firms do not misuse investors’ funds.
Additionally, the rules that are currently in place require crypto exchanges to disclose certain information. For example, exchanges are to send personal details of their clients to regulatory authorities whenever funds are sent between firms.
The essence of this rule is to curb the rising number of illegal activities taking place in the crypto sector.
In 2021, crypto asset managers and investment companies were asked to submit a license application. This license was to allow them to operate in Thailand.
Before then, firms that traded assets that did not meet the legal definition of futures contracts or securities were not under the watchdog’s jurisdiction. However, this has changed over the years due to fraud.
Investors were advised not to invest in cryptocurrency funds managed by unlicensed portfolio managers. If they do so, they will not receive compensation if their funds are lost.