On Sept. 1, 2022, when the SEC approved the need for security warnings by cryptocurrency business operators to disclose the risks of trading cryptocurrencies, the discussion around new regulations for investor protection began
New rules for digital (crypto) asset service providers focused on investor protection have been issued by Thailand’s Securities and Exchange Commission (SEC).
Highlighting the risks associated with cryptocurrency trading, the new guidelines require digital asset service providers to offer adequate warnings.
All platforms must display a message that reads: “Cryptocurrencies are high risk. Please study and understand the risks of cryptocurrencies thoroughly, because you may lose the entire investment amount.”
The warning message must be clearly visible, and before customers can use the service, the business operator must arrange for the users to give consent and acknowledge the risks.
The new guidelines, apart from a trading risk disclaimer, also prohibit service providers from using customers’ funds for lending or investment.
By prohibiting crypto platforms from offering any form of return on deposited crypto by customers, the Thai SEC has banned crypto lending services. The SEC’s aim is to increase protection for investors from the risks of lending services. The new regulations are set to come into effect on July 31, 2023.
On Sept. 1, 2022, when the SEC approved the need for security warnings by cryptocurrency business operators to disclose the risks of trading cryptocurrencies, the discussion around new regulations for investor protection began. During meetings on Dec. 1, 2022, and May 11, 2023, the rules prohibiting digital asset business operators from providing services or supporting deposit-taking and lending services were discussed.
The new investor protection rules come in the wake of the massive crypto lending crisis during the bear market in 2022. A significant chunk of crypto lending firms, which collected billions in customer deposits by promising hefty returns, went bust during the bear market. Leading lending firms, including Celsius and BlockFi, filed for bankruptcy, resulting in investor money getting stuck in bankruptcy proceedings.
CIO News, a proprietary of Mercadeo, produces award-winning content and resources for IT leaders across any industry through print articles and recorded video interviews on topics in the technology sector such as Digital Transformation, Artificial Intelligence (AI), Machine Learning (ML), Cloud, Robotics, Cyber-security, Data, Analytics, SOC, SASE, among other technology topics