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- A standardized message outlining associated risks must be displayed on all platforms at all times.
- Exchanges are prohibited from offering any form of return on clients’ deposited tokens.
To protect investors, the Securities and Exchange Commission (SEC) of Thailand has introduced new regulations for firms that provide digital asset services.
Under the newly established regulations, companies offering digital asset services are required to clearly convey the risks associated with investing in cryptocurrencies. A standardized message must be consistently visible across all platforms.
The message states:
“Cryptocurrencies are high risk. Please study and understand the risks of cryptocurrencies thoroughly, because you may lose the entire investment amount.”
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Prior to utilizing the service, the company owner must ensure that users provide consent and acknowledge the risks, with the warning message prominently displayed.
Prohibition on Lending or Investing Funds
The new regulations forbid service providers from lending or investing clients’ funds and also include a disclaimer regarding trading risks.
As a result of the ban on crypto lending services by the Thailand SEC, exchanges cannot offer any form of return on clients’ deposited tokens. The SEC aims to protect investors from financial fraud and other risks in the capital markets. These new regulations will take effect in Thailand on July 31, 2023.
The SEC’s endorsement of the requirement for security warnings by cryptocurrency operators to inform users about the risks of trading cryptocurrencies initiated discussions on new regulations for investor protection on September 1, 2022.
Following a significant crypto lending crisis during the bear market of 2022, new measures for investor safety were implemented. During the downturn in the cryptocurrency market, several lending firms that had accumulated billions in client deposits by promising high returns collapsed.
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