Thai SEC Prohibits Banks From Lending, Investing in Crypto Assets

• Thailand’s Securities and Exchange Commission (SEC) introduced new regulations aimed at digital assets, including risk disclosure for cryptocurrency trading and a ban on deposit-taking and lending services.
• The rules state that users must receive an investment suitability assessment before accessing services, with their consent to acknowledge the risks required.
• Starting from July 31, 2023, operators, brokers, and traders in cryptocurrency trading centers must provide a clear warning about the high-risk nature of cryptocurrencies.

Thailand Introduces New Digital Asset Regulations

Risk Disclosure for Cryptocurrency Trading

Starting from July 31, 2023, operators, brokers, and traders in cryptocurrency trading centers must provide a clear warning about the high-risk nature of cryptocurrencies. Users must also receive an investment suitability assessment and information on appropriate investment proportions before accessing services, with their consent to acknowledge the risks required.

Ban on Deposit-Taking & Lending Services

Effective from Aug. 30th 2023 digital asset business operators are prohibited from offering deposit-taking and lending services except for specific exceptions stated in the official notification. These regulations are aimed at safeguarding investors and fostering responsible practices in the digital asset industry.

Previous Discussions

Discussions regarding these regulations were initiated back on Sept 1st 2022 where it was agreed upon that cryptocurrency business operators would be required to provide security warnings disclosing the risks associated with trading cryptocurrencies. Subsequent meetings then focused on rules surrounding prohibition of digital asset business operators from offering services or supporting deposit-taking & lending services.

Trend in Southeast Asia

Following a recent trend in Southeast Asia Thailand has become the second country in the region to announce a ban on cryptocurrency exchanges providing lending services highlighting growing regulatory scrutiny over activities related to crypto assets across various countries .

Conclusion

The introduction of these new guidelines is intended to enhance investor protection by ensuring users understand the potential loss of their entire investments when engaging in cryptocurrency trading activities.