By Akalarp Yimwilai – Chief Legal Officer and Co-Founder of Zipmex
30 January 2020 – When digital assets hit a bull run in 2017 the price of Bitcoin soared to nearly US$20,000, and new operators started flocking to the marketplace. The rise in popularity brought with it new products and services – as well as a few cowboys looking to make a quick buck, no matter the cost. After a series of fraudulent scandals and scams, the financial sheriffs of the world launched regulatory crackdowns and in 2018 winter fell upon the crypto landscape, with the price of Bitcoin plummeting. But as Charles Darwin famously said, “it is not the strongest of the species that survives, nor the most intelligent… it is the one that is most adaptable to change.”
As the crypto winter started to thaw, the rise of adaptability saw a new wave of digital asset projects begin to bloom. One of the biggest changes has been a shift in regulatory attitude. Global lawmakers started to change their tune, and instead of nationwide crypto bans, they started to reassess the beneficial possibilities of crypto and how their countries could embrace this emerging asset class. In June 2018, Thailand was one of the first nations to formally introduce specific digital asset legislation, its Securities and Exchange Commission (SEC) unveiling its regulatory framework for cryptocurrencies and ICOs. This was the first comprehensive law for the industry within the region, introduced to not only protect investors, but to foster those seeking to play by the rules and establish a legitimate business.
Zipmex was born out of the idea of creating a trusted, legitimate, safe, licensed and regulated digital asset exchange for traditional and novice investors alike – so naturally, we gravitated towards Thailand’s well-defined rules and regulations. We had already established ourselves in Singapore, Indonesia and Australia, and Thailand’s newly enacted laws made the country a key focus for expansion. Myself and Zipmex co-founder Marcus Lim sought to incorporate Zipmex Company Limited (Thailand) and our first step was to meet and consult with SEC Thailand, which provided invaluable guidance and support. We wanted to ensure we had a good understanding of the rules and regulations before seeking a license and soon we kicked-off a ‘pre-consultation’ stage.
This involved providing extensive documentation regarding our organisation structure, management controls, operating models, policies and much more. Like all regulated financial institutions, regulators are focused on key operational efficiencies such as the Know-Your-Customer (KYC) process and protocols, as well as anti-money laundering and counter-terrorism financing policies. Since Zipmex is a unique breed of financial institution – a digital assets exchange – the settlement of funds, custody of digital assets and market surveillance were also addressed and reviewed. After 12 months of working with SEC Thailand and other government entities, Zipmex was officially awarded a Digital Assets Exchange license by the Ministry of Finance on the 8th of January 2020. The process may have been long, but certainly worthwhile.
Beyond gaining a license to legally operate in the country, the SEC Thailand also provided constructive feedback that contributed to many of the key features and enhancements now available on the Zipmex platform. Zipmex is the first digital asset exchange to be granted a license this year, and the sixth since regulations started (although not all of the six are still operational). Not everyone that applies is granted approval – since implementing the digital asset exchange license application process in early 2019, two exchanges have been rejected on the basis that they failed to meet the criteria relating to KYC, IT security and cybersecurity. Some may say the rigorous process is harsh, but it is needed in order to bring credibility to the digital asset space.
The next step for us is to prepare for the official launch of Zipmex Thailand in 2020, in order to make sure that we provide the best customer experience. Not only do we work with the SEC Thailand, but we are also audited every quarter and work closely with the Anti-Money Laundering Office of Thailand to detect, prevent and report any fraud or suspicious financial activities – just like a traditional financial institution. We have always valued transparency and we adhere to high standards of financial reporting. Our journey has really only just begun and even though we have forged key relationships with SEC Thailand and other government entities, we are still yet to develop our most important relationship: the relationship with you, the customer. We look forward to the opportunity to bring the Zipmex standard to Thailand, providing a secure, trusted and reputable digital asset exchange.
Zipmex is a licensed and regulated digital assets exchange of Thailand. Zipmex works in collaboration with the SEC Thailand and other related parties to provide a trusted and secure platform for customers to exchange digital assets.
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