Industry Insights on Cryptocurrency and Blockchain Technology in Thailand

February 17, 2019

Thailand is one of the few countries in the region with defined regulations addressing digital assets, thanks to announcements from the government and central bank, as well as regulations from its markets regulator, the Securities and Exchange Commission of Thailand (SEC).

Thailand’s timeline towards regulating cryptocurrencies and blockchain technology:

July 30th, 2013 – The Bank of Thailand (BoT) announces its decision to outlaw the buying and selling Bitcoin, as well as the exchange of goods or services for Bitcoin. This includes sending Bitcoin to persons outside of the country and receiving Bitcoin from anyone outside of Thailand. However, the ban would later be dropped on February 15th, 2014.

September 14th, 2017 – The Securities and Exchange Commission of Thailand publishes its statement entitled “SEC Thailand’s Viewpoint on ICO.“

February 11th, 2018 – Thailand’s first Initial Coin Offering (ICO) takes place for JFin coin, a currency issued by Jaymart PLC/J Ventures Co., Ltd. with an ICO price of 6.6 baht.

February 12th, 2018 – The BoT issues a letter to banks and financial institutions in the country with a request for all agencies to clearly separate transactions made with cryptocurrencies from tradition bank transactions.

May 14th, 2018 – The Thai government issues the Royal Decree on Digital Asset Business, defining the differences between cryptocurrency businesses, digital asset businesses, ICO-issuing business, and other related businesses, such as mining and custody.

The decree states that for activities relating to cryptocurrency businesses, digital asset businesses, and ICO-issuing businesses, all market participants or stakeholders must register with the SEC within 90 days from the effective date of the decree. Stakeholders must also contact the Ministry of Finance in order to apply for a license to operate a digital asset business.

The same day, the Thai government issues the Royal Decree on Digital Asset Taxation, which further outlines rules and regulations governing taxation on digital asset transactions, especially withholding tax and VAT obligations. The tax decree takes effect immediately, without requiring additional regulations.

July 3rd, 2018 – The SEC issues rules and regulations to address secondary business intermediaries, including digital asset exchanges, digital asset dealerships, digital asset brokerages, and ICO portals.

The same day, the SEC issues additional regulations, namely, No.15/2561 on the offering of digital tokens to the public and No.16/2561 on rules, conditions, and procedures for approving the provider of the digital keeper system (effective July 16th, 2018).

July 24th, 2018 – The SEC opens its door to accept license applications for cryptocurrencies.

August 1st, 2018 – The BoT revokes its earlier letter published on February 12th, 2018 that restricted banks from dealings with cryptocurrency and digital asset businesses in any form. The move allows banks to carry out a wider range of activities, while providing increased flexibility to its subsidiaries. However, banks and financial institutions in Thailand remain prohibited from directly dealing with cryptocurrencies.

August 15th, 2018 – This day marks the registration deadline for existing cryptocurrency firms to carry out operations while applying for a license. Qualified exchanges include Bitcoin Co (bx.in.th), Bitkub Online Co Ltd (bitkub.com), Cash2Coins Co Ltd (cash2coins.com), Satang Corporation Co Ltd (tdax.com), Coin Asset Co Ltd (coinasset.co.th), and Southeast Asia Digital Exchange Co Ltd (seadex.io), as well as trader and dealer Coins TH Co (coins.co.th). Digital Coin Co Ltd (thaiwm.com) issues a letter to the SEC requesting to withdraw its license to sell digital assets. The company would later cease operations from September 28th, 2018.

August 22nd, 2018 – The BoT unveils a roadmap for ‘Project Inthanon,’ which aims to develop a proof-of-concept prototype for wholesale funds transfer that can be achieved by issuing a wholesale Central Bank Digital Currency (CBDC). The central bank announces that eight other banks will join hands to take part in a collaborative project that will use the distributed ledger technology platform or DLT made by R3. The project’s end goal is to use the digital currency to facilitate interbank transactions, as well as increase the efficiency of the current financial market structure in Thailand.

October 26th, 2018 – The SEC publishes a statement announcing that initial coin offerings (ICOs) in the country are licensed in accordance with Thailand’s new regulatory framework. Though a total of nine tokens have been listed, they are rejected by the SEC due to their incomplete licensing applications with the regulator.

November 23rd, 2018 – The SEC issues a notice addressing the general public to be aware of 14 unauthorized websites offering services of buying and selling cryptocurrencies and related products. The SEC reiterates its statement made a month earlier that no cryptocurrency business in the country has been granted full approval for its operations. It adds that seven companies, however, have been approved on a temporary basis, while the SEC reviews their applications.

November 29th, 2018 – The SEC’s Deputy Secretary General voices the agency’s doubts about Security Token Offerings (STOs), saying that at the moment, the SEC has not yet decided whether STOs should fall under the SEC Act or the Digital Asset Act, depending on the conditions and details in the white paper.

The same day, the SEC issues a warning regarding the Satang/Tdax case about Thai-based ICOs under foreign legislation. It states that an STO affiliated with Thai investors introduced in an international market would be considered illegal under the Digital Asset Act. The SEC views companies making an STO as attempting to avoid regulated fundraising channels.

December 1st, 2018 – The SEC has yet to issue any license for digital asset businesses (exchange, dealer, broker, ICO portal) or for ICOs. However, seven cryptocurrency companies run their businesses in the country under temporary approval, as the SEC reviews their license applications.

January 8th, 2019 – The SEC approves Bitcoin Co (bx.in.th), Bitkub Online Co Ltd (bitkub.com) and Satang Corporation Co Ltd (satang.pro) as digital asset exchanges. The regulator also approves Coins TH Co Ltd (coins.co.th) as a cryptocurrency broker and dealer. However, the SEC denies Cash2Coins Co Ltd (cash2coins.com) and Southeast Asia Digital Exchange Co Ltd (seadex.io) licenses for digital asset exchanges.

Source: pugnatorius.com/cryptocurrency/

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