Thailand’s SEC Introduces New Rules For Crypto Custody Providers
The Thailand Securities and Exchange Commission (SEC) is gearing up efforts to protect crypto investors by releasing new guidelines for crypto custodians.
Thailand SEC Introduces Guidelines For Crypto Custodians
The securities regulator announced the new regulations for virtual asset service providers (VASPs) on January 17th. According to the rules, VASPs must create a crypto wallet management system to ensure an efficient process.
In addition, the recent guidelines are mainly for VASPs or custodians that offer cryptocurrency storage services. There are three main requirements in the new regulations.
Furthermore, it provides guidelines and policies to regulate the crypto wallet and private key risk management. VASPs must communicate their policies to regulators and provide plans of action to ensure compliance with the rules.
The SEC has also requested that crypto custodians submit policies and procedures for creating, building, and managing digital keys and wallets. Additionally, it mandates crypto custodians to plan for unexpected events that could impact their wallet management system.
“This entails establishing and evaluating protocols, assigning individuals to specific roles, and reporting the incident.,” the regulator said.
Furthermore, the regulator said crypto firms must regularly audit their systems’ security. Also, they must conduct digital forensic investigations if any event affects their crypto custody system’s security.
This investigation is to ensure that clients’ assets are not affected. Per the announcement, the latest regulations have taken effect since January 16th.
Crypto custodians have six months to ensure they fully comply with the rules.
Thailand SEC Tightens Crypto Regulation
Thailand’s SEC has recently implemented stricter cryptocurrency regulations in line with its goal to strengthen oversight in the wake of industry failures such as the collapse of FTX. Earlier in January, the SEC investigated Zipmex exchange for allegedly offering crypto management services to Thailand citizens without a proper license.
The regulator gave Zipmex until January 12th to clarify its position in the country and whether it has a license. If Zipmex had been operating without a permit, the exchange must get permission from the necessary authorities to continue operation.
Meanwhile, the resentment between Thailand SEC and Zipmex began last year. On September 7th, the watchdog filed a report with the police about Zipmex.
In the report, the regulator argued that the exchange submitted incomplete information in its compliance form. This report came a few months after Zipmex faced a financial crisis in July 2022.
The exchange halted withdrawals on its platform at the time, citing the bearish market and strained finances. However, Zipmex was not the only firm that halted withdrawals. Other crypto firms, such as Celsius and Hodlnaut, also paused withdrawals.
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