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The Securities and Exchange Commission of Thailand has released new rules for digital asset service providers focused on protecting investors.
The new guidelines require digital asset service providers to offer adequate warnings outlining the risks associated with trading cryptocurrencies. All platforms should display the following message:
“Cryptocurrencies are a high risk. Please carefully study and understand the risks of cryptocurrencies, because you may lose the entire amount of your investment.”
The warning message must be clearly visible and before customers can use the service, the business operator must ensure the consent of the users of the service and acknowledge such risks before using the service.
In addition to avoiding trading risks, the new rules also prohibit service providers from using customer funds for lending or investing.
The Securities and Exchange Commission of Thailand has banned cryptocurrency lending services, thereby preventing cryptocurrency platforms from offering customers any form of deposited cryptocurrency refund. This will enhance the protection of investors from the risks associated with such lending services. The new rules should come into force on July 31, 2023.
Discussions on new investor protection rules began on September 1, 2022, when the SEC approved the need for security alerts for crypto business operators to disclose the risks associated with trading cryptocurrencies. Rules prohibiting digital asset business operators from providing or maintaining deposit and lending services were discussed at the December 1, 2022 and May 11, 2023 meetings.
Related: Cryptocurrency exchange Bitkub attacked by Thai SEC with claims of fraudulent trading
The new investor protection rules come into effect following a massive cryptocurrency lending crisis during the 2022 bear market. A significant portion of cryptocurrency lending firms, which have collected billions in customer deposits promising huge returns, went bankrupt during the bear market. Leading lenders, including Celsius and BlockFi, have filed for bankruptcy, leaving investor money stuck in bankruptcy proceedings.