Thailand's SEC Proposes Crypto Investment Regulations

The Thai Securities and Exchange Commission (SEC) has unveiled a groundbreaking proposal to reshape the country's financial investment landscape.

On Wednesday, the SEC announced draft regulations allowing mutual and private funds to invest in cryptocurrencies.

This move responds to the burgeoning interest in digital assets as Thailand continues establishing itself as a crypto-friendly nation, ranking 10th globally in adoption.

The proposed regulations, which focus on revising the investment criteria for mutual funds in digital assets, are currently open for public feedback.

The SEC has outlined that these funds will have the opportunity to invest in crypto exchange-traded funds (ETFs) listed on US exchanges and select investment tokens.

This flexibility particularly appeals to Thai investors, increasingly looking to diversify their investment portfolios with digital assets.

Investment Limits and Opportunities

One key aspect of the draft regulations is the allowance for funds to invest in investment tokens, subject to existing investment limits associated with traditional securities. These include limits on single entities, group limits, and concentration limits.

However, the regulations take a more liberal approach for institutional investors and ultra-high-net-worth individuals, permitting them to invest in crypto ETFs without any investment limit.

According to Thai SEC deputy secretary-general Anek Yooyuen, investment tokens will be treated similarly to transferable securities due to their comparable risks and features.

"Relevant criteria will be revised to support the establishment and management of funds investing in digital assets, such as asset custody, digital asset value calculation, information disclosure, and appropriate advertising," Yooyuen stated.

Regulatory Sandboxes and Penalties

The announcement also highlighted other significant developments in Thailand's regulatory framework. Pending a public hearing, the SEC is contemplating allowing authorized initial coin offering portals to use outsourced companies.

Additionally, the Thai SEC plans to permit ten private companies to conduct trials for exchanging cryptocurrencies for Thai baht as part of a digital asset regulatory sandbox project.

To maintain strict compliance, the SEC is considering increasing penalties for crypto firms that violate the rules. Offenses are deemed severe, and consequences could include revoking licenses.

Securities firms that send inappropriate trading orders may face fines ranging from 1 million to 3 million baht. Investors manipulating stocks could be subject to civil and criminal penalties.

A Landmark Approval

Earlier this year, Thailand marked a significant milestone by approving its first crypto ETF. Issued by One Asset Management (ONEAM), the Thai SEC's endorsement of ONEAM's Bitcoin ETF represents a pivotal moment in the country's evolving regulatory framework for digital assets.

This approval underscores Thailand's commitment to embracing the future of finance and supporting the growth of its digital asset ecosystem.