In order to increase investor protection, the Thai Securities and Exchange Commission (SEC) is getting ready to establish stricter laws on digital assets that will parallel those on the international market. Thai investors that used Zipmex were significantly impacted by Celsius Network, the operator of the loan platform, going bankrupt.
The market for digital assets has been hurt this year by a number of incidents that have damaged trust in the sector, its participants, and its laws. Three Arrows Capital, a Singapore-based cryptocurrency hedge fund, the TerraUSD (UST) stablecoin, and the collapse of the Luna cryptocurrency network were among them.
Then, amid allegations concerning a lack of efficient administration and controls in the business, came the collapse of FTX, one of the biggest cryptocurrency exchanges and service providers in the world.
Following the collapse of cryptocurrency exchanges and other digital asset lending platforms, many investors have suffered significant losses.
Additionally, it has been shown that crypto advertising contains material that could deceive investors and raise the dangers of their investments. In order to attract investors, some digital asset service providers have recently spent money on advertising by recruiting celebrities, all while failing to disclose the information that is needed by law.
The Thai SEC claimed that all of these incidents demonstrate the industry’s vulnerability and a lack of adequate monitoring. The Fintech Department of the SEC believes that regulators should be more involved in boosting investor protection systems.
Examples include the use of distributed ledger technology (DLT), a digital system for recording the transaction of assets and their details in multiple locations simultaneously. Regulators in nations like Singapore, the UK, and Japan have also announced new guidelines for regulating digital assets.
To crack down on criminal conduct involving misleading digital asset advertisements, the US regulator of digital assets has put disclosure requirements into effect.
Although it opposes wide-spread use of cryptocurrencies, the Monetary Authority of Singapore (MAS) does not prevent the advancement of these technologies. By employing DLT to support its ambition of becoming a fintech hub, the nation seeks to advance the digital asset ecosystem.
Technology management services, hedging against retail investors, maintaining stablecoin pegs, fighting potential financial stability threats, and imposing anti-money laundering and anti-terrorism funding measures are the five regulatory hazards that MAS works on.
While this is going on, Japan has a policy of regulating digital assets with an emphasis on the security of the financial system. Following the UST crash, the Financial Services Agency (FSA), a Japanese established financial regulator in charge of regulating banking, released regulations requiring stablecoin issuers to be banks, trusts, or fund transfer service providers. To reduce threats to financial stability and to adequately safeguard stablecoin holders, these operators must abide by rules established by the FSA, including funding requirements.
The SEC in Thailand is working to enhance the regulation of digital assets. The regulator established a working committee made up of members from existing government agencies and the private sector to investigate and make suggestions for ways to modify the rules in order to accommodate the evolving environment and rising dangers associated with digital assets. The application of DLT in the commercial sphere is one of the recommendations.
The Thai SEC is also keeping an eye out for new dangers and has vowed to tighten up the rules to better regulate the sector and protect investors in regards to matters like safeguarding their assets, enforcing rules governing advertisements and product promotions, avoiding conflicts of interest, and bolstering cybersecurity. According to the SEC’s Fintech Department, these adjustments are in line with the oversight of foreign and international regulators.