REGULATION

Thailand's SEC prohibits crypto businesses from offering lending and pledging services, platform trading risks warning must be clearly visible

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Thailand

The Securities and Exchange Commission (SEC) of Thailand announced that in order to enhance the protection of cryptocurrency investors, it will prohibit digital asset operators from offering yield-generating products to users, as well as digital asset custody services related to lending.

Thailand SEC: Increased Trading Risk Warnings Required

According to an announcement by the Thailand SEC on July 3, exchanges must disclose potential risk warnings related to cryptocurrency trading. The warnings must be clearly visible, and users must agree to them to continue using the platform services. This regulation will come into effect starting from July 31 this year.

Thailand SEC: Prohibition on Digital Asset Operators Providing or Supporting Loan Services

This has been under discussion by the SEC since September last year, and public opinions were sought and public hearings were held in March this year, seemingly in response to the bankruptcies of major lending platforms such as Voyager, BlockFi, Celsius, etc., over the past year.

The regulation will come into effect starting from August 30 this year, and includes:

  • Users' digital assets deposited cannot be used for lending, investment, or collateral, and returns cannot be paid to users.

  • Using users' deposited digital assets to provide returns through company marketing expenses and budgets is prohibited.

  • Third parties are not allowed to provide related services or advertisements.

In March this year, the Thailand SEC, together with the central bank and the Ministry of Finance, announced the prohibition of using cryptocurrencies for payments starting from April 1, to avoid risks to the overall financial and economic system. Cryptocurrency payment service providers were required to cease services within 30 days, but this does not affect cryptocurrency trading and investment.

Recently, the Monetary Authority of Singapore (MAS) also banned crypto firms from providing lending and collateral services to retail investors.