Thai SEC introduces new rules for custodians of crypto assets
The Thai Securities and Exchange Commission announced the completion of a new set of rules related to the storage of crypto assets. They, according to the department, are designed to significantly increase the protection of local investors.
The primary goal of the bill was to prohibit cryptocurrency custodians from benefiting from funds entrusted to them by clients. From now on, in Thailand, custodians are not allowed to use the assets in the account of one client in the interests of another or for their benefit. For example, provide a loan to someone in the equivalent of digital currencies at interest at the expense of another person's assets.
With the entry into force of the new rules, the SEC also wants to oblige custodians to place their clients' funds exclusively in the country's commercial banks and agree in advance on the interest rate with whoever entrusts them with the custody of assets. At the same time, it should not exceed the actual rate of commercial banks, which they provide to the custodians themselves. In addition, companies responsible for holding funds must close client accounts daily, which can guarantee the safety of money and the impossibility of using it for the benefit of third parties.
The final stage of customer care by the Thai financial regulator was an innovation that ensures the protection of fiat deposits by custodians at the same level as digital assets. That is, in full compliance with the principles established by the decentralized approval authority, using a multi-signature authorization and mandatory balance check.
The SEC will give custodians a month to implement the above rules, advising on this matter until September 22. Otherwise, the operators face an impressive fine.
Thailand's SEC has stepped up this year amid the explosive growth of the cryptocurrency industry. So, in March 2021, representatives of the local department proposed to set a minimum threshold for investments in bitcoin and other cryptocurrencies at $32,000 in annual income, and in June, the regulator introduced a ban on crypto exchanges for processing specific types of tokens, among which were non-fungible tokens, as well as "Meme coins".
Other financial authorities in Thailand, meanwhile, are actively promoting the idea of a national digital currency (CBDC), while the Thai bank still does not recognize cryptocurrencies as legal tender. Despite this, according to Chainalysis, the country was ranked 12th on the list of states with a high level of adoption of a new asset class in 2021.