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In a recent press release, the Thai SEC has approved four companies based on digital assets for compliant transactions in Thailand. While other parts of Asia remain hesitant to establish a clear regulatory framework for digital resources, Thailand has taken numerous steps to provide clear guidelines and attract businesses across Asia and beyond.
Explanation of the Thai SEC and approval of the cryptocurrency trade
The Asian region has presented conflicting answers regarding the regulation of digital resources.
China has explicitly rejected the latest wave of tokens by declaring the security token (STO) offers to be illegal. Thailand, on the other hand, has taken several measures to provide a clear regulatory framework for digital resources.
More recently, the Thai Securities and Exchange Commission (SEC) has approved four cryptocurrency and startup blockchain grants that have filed a license to operate with the commission.
According to the official statement, a total of seven blockchain-based companies have applied for this license. The four who received the approval were the following: Bitcoin Co., Ltd .; Bitkub Online Co., Ltd.; Satang Corporation Limited; and Coins TH Company – an authorized broker and dealer.
Of the four, at least one has publicly planned the use of security tokens. Satang Corp – an exchange of cryptocurrencies based in Thailand with a trading volume of $ 24 million of approximately $ 1 million at the start of December 2018 – announced plans for a security token offering (STO) at the beginning of 2019. The offer, with the support of the SEC, aims to raise $ 9.9 million.
However, not all the companies that filed the licenses received the go-ahead. Two companies were refused: Cash 2 Coin Company Limited and South East Asia Digital Exchange Limited (SEADEX). The reasoning for this refusal varied from the lack of KYC procedures that comply with the failure to comply with information security standards.
The Thai Ministry of Finance has allowed these two companies to continue operating until January 14thth 2019. After this date, it is strongly recommended that all digital resources be returned to their respective owners. Both companies are free to request a license to operate in the future.
The last company with a pending status is Coin Asset Company Limited. According to the statement, the continued examination is the result of several changes of leadership at the executive level of the company. Meanwhile, the company is free to conduct business as it has done.
How are security tokens legal in Thailand?
Archari Suppiroj is the director of the FinTech department of SEC Thailand. Recently, he only shared the agency's position on security tokens with The Tokenist:
1. "Securities Token Offer" or "STO Offer" is a term coined in a jurisdiction in which people discussed whether a particular token is a security. If an issuer decides to treat its tokens as securities – the sale of these tokens must follow the securities law. On the contrary, Thailand has chosen to enact a new law on digital goods, so some tokens could already fall under this regime. However, depending on their design, some tokens could be considered as securities and fall within the Securities and Exchange Act.
2. If an issuer wishes to offer tokens in Thailand and the token design does not fall under the securities law, the digital asset regime can be used. If it falls into shares or bonds, the issuer may not be able to offer as there may be barriers to the existing regime that need to be corrected. The SEC is examining this.
3. If the issuer is a registered company offering elsewhere outside of Thailand without intending to solicit investors in Thailand, our schemes will not apply.
We can clearly see, therefore, that while countries like China maintain a hostile attitude towards security tokens, Thailand is working to allow the compliant integration of blockchain and traditional finance.
What do you think of the regulatory situation for security tokens in Thailand? Will this lead to Thailand becoming an outbreak for the issuing of security tokens and the regional leader? Let us know what you think in the comments below.
Image courtesy of Securities and Exchange Commission Thailand.
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