While Hong Kong is embracing cryptocurrencies, Singapore, Belarus, and, more recently, Thailand are implementing restrictions on crypto usage to protect users from potential risks.

Thai SEC Introduces New Set of Rules

Thailand’s Securities and Exchange Commission (SEC) has introduced a new set of regulations for digital asset service providers. The rules aim to give investors adequate protection through risk warnings, consent requirements, and the prohibition of fund usage.

With the new guidelines, all digital asset businesses must provide adequate warnings about the risks associated with crypto trading activities. They also need to ensure that investors are fully aware of the high-risk nature of cryptocurrency investments.

Additionally, all crypto platforms must attach a specific message that states:

“Cryptocurrencies are high-risk. Please study and understand the risks of cryptocurrencies thoroughly because you may lose the entire investment amount.”

The rules also require digital asset service providers to ensure customers have a clear understanding of the potential dangers associated with cryptocurrency investments before engaging in further activities.

While trading crypto assets isn’t prohibited in Thailand, using customers’ funds for lending or investment is soon illegal, as outlined by the country’s authorities.

The SEC alternatively announced the prohibition of using customer funds for lending or investing purposes. This measure is implemented to safeguard investors’ funds and prevent them from being misused by digital asset service providers.

The restrictions are seen as an attempt by Thailand regulators to safeguard customers’ funds from potential risks, especially after several crypto lenders went burst, which led the market to a major setback last year.

Two prominent crypto lenders, Celsius and BlockFi, filed for bankruptcy protection following price declines and TerraUSD’s collapse, resulting in brutal losses of funds for many investors.

Thailand’s SEC approved risk warnings in September 2022 and discussed the prohibition of lending services in meetings held in December 2022 and May 2023. The new regulations will take effect on July 31, 2023.

Differences in Legal Approaches

Thailand is joining the ranks of countries taking a closer look at the cryptocurrency market as global policymakers intensify their scrutiny. Belarus and Singapore have recently enacted regulations to strengthen control over cryptocurrencies.

Belarus, one of the early adopters of Bitcoin and cryptocurrency mining in the EU, has taken steps to regulate the market. The Ministry of Internal Affairs of the Republic of Belarus issued a notice on July 2 introducing a new bill that bans peer-to-peer (P2P) cryptocurrency exchanges in private transactions.

This move comes in response to the rise in cybercrime in Belarus, with crackdowns on 27 individuals involved in illegal cryptocurrency exchange services, resulting in nearly 22 million Belarusian rubles ($8.7 million) of illegal income.

Singapore has also proposed stricter regulations for crypto and cryptocurrency exchanges. By the end of the year, crypto exchanges will be required to keep customer assets in a trust to ensure the protection of user funds.

This proposal follows the FTX crash in November, and the aim is to segregate customer assets from private assets and deposit them with a trustee. Additionally, there are discussions about banning individual investors from lending and participating in staking, as stated by the Sentosa Banking Authority.

In contrast, Hong Kong is positioning itself as a global hub for Web3 technologies. Starting on June 1, crypto exchanges that meet specific requirements, such as secure asset custody, segregation of customer assets, avoidance of conflicts of interest, and cybersecurity standards, can apply for licenses to operate legally in the country.

These licensed platforms will need to conduct thorough assessments of investors’ understanding of digital assets and their risk tolerance and establish exposure limits. They are also required to form review and admission committees to govern the tokens they offer.

The post Thailand Introduces New Crypto Regulations appeared first on Blockonomi.

---

Filed under: Bitcoin - @ July 5, 2023 8:12 am