Thailand has announced a nationwide ban on lending and staking offerings by digital asset service providers as part of ongoing efforts to protect investors from bad actors in the space.
The new rules came via an official notice on July 3 from Thailand’s Securities and Exchange Commission (SEC), the body exercising supervisory powers over the local digital currency industry. Per the rules, industry operators are barred from offering returns on deposits and lending with customers’ digital assets.
However, the rules provide that an exception may be made when it is in the nature of sales promotion according to the rules prescribed by the SEC. Going forward, the ban on staking and lending extends to making advertisements to the general public.
The new rules include a requirement for digital currency exchanges and brokers to include warnings on the danger of investing in digital currencies to customers. The warning must be displayed conspicuously on the website and contain details of the investment suitability assessment results.
“Cryptocurrencies are high risk,” reads the risk warning to be displayed by digital asset firms. “Please study and understand the risks of cryptocurrencies thoroughly, because you may lose the entire investment.”
The new rules are expected to come into operation on July 31 and is the culmination of several initiatives put in place by Thailand’s regulators to protect investors. In January, the SEC floated rules to regulate the internal activities of virtual asset service providers bordering on creating a contingency plan in the event of security breaches and storage of wallet keys.
“An audit of system security is also required, as well as digital forensic investigation in case of any event affecting the security of systems related to digital asset custody, which could cause significant impacts on clients’ assets,” the SEC said.
Early in the week, Singapore released draft rules to ban digital currency exchanges from offering staking services to retail clients.
A robust approach to regulations
After bearing the brunt of industry collapses in 2022, Thailand’s regulators sought to prevent a repeat by adopting a detailed approach toward policing the industry. One of the earliest facets to face regulatory control was digital currency advertising, as the SEC launched new rules to standardize operations.
The rules provided for all digital asset ads to be presented without distortion of facts and include clear labeling of the risks associated with digital currencies. Furthermore, all costs and details regarding digital currency ads should be submitted to the SEC, including information involving the use of influencers.
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