Thai SEC Unveils Crypto Investment Regulations for Funds

The Thai Securities and Exchange Commission (SEC) has introduced draft regulations that would permit mutual and private funds to invest in cryptocurrencies. This initiative is currently open for public feedback regarding the proposed changes to the investment criteria for mutual funds in digital assets.

Growing Interest in Cryptocurrency

This regulatory proposal comes at a time of increasing interest in cryptocurrency investments. Thailand is recognized as one of the most crypto-friendly nations, ranking 10th globally in terms of cryptocurrency adoption.

Investment Opportunities for Funds

The proposed regulations will allow funds to invest in crypto exchange-traded funds (ETFs) listed on US exchanges. Additionally, funds will have the option to invest in investment tokens, which have garnered significant interest from Thai investors.

• Funds will adhere to existing investment limits for traditional securities, including:
  • Single entity limit
  • Group limit
  • Concentration limit

For institutional investors and ultra-high-net-worth individuals with a high-risk tolerance, there will be no investment limits on crypto ETFs.

Regulatory Framework for Digital Assets

According to Thai SEC deputy secretary-general Anek Yooyuen, investment tokens will be treated similarly to transferable securities in terms of investment ratios. This is due to their comparable risks and features to traditional securities, such as debt securities.

The SEC's announcement highlighted that relevant criteria will be revised to facilitate the establishment and management of funds investing in digital assets, covering aspects such as:

• Asset custody
• Digital asset value calculation
• Information disclosure
• Appropriate advertising

Recent Developments in Thailand's Crypto Market

In June, Thailand approved its first crypto ETF, issued by One Asset Management (ONEAM), marking a significant milestone in the country's regulatory landscape for digital assets.

Future Considerations by the Thai SEC

In addition to the proposed regulations for mutual and private funds, the Thai SEC is also contemplating allowing authorized initial coin offering (ICO) portals to utilize outsourced companies.

• This measure has been endorsed by the SEC but requires a public hearing before implementation.

Furthermore, the SEC plans to permit 10 private companies to conduct trials for exchanging cryptocurrencies for Thai baht as part of a digital asset regulatory sandbox project.

Increased Penalties for Violations

The Thai SEC is taking a firm stance against violations of its regulations by crypto firms. The authority aims to enhance penalties for companies that breach rules, which could lead to the revocation of their licenses.

• Securities firms that submit inappropriate trading orders may face fines ranging from 1 million to 3 million baht.
• Investors found guilty of manipulating stocks could face both civil and criminal penalties.

As the Thai SEC moves to establish a more structured regulatory environment for cryptocurrency investments, these proposed regulations could significantly impact the future of digital asset investments in Thailand.