2 years ago
140 FinanceFeeds -
In a Wednesday announcement from the Thai SEC, the regulatory body is specifically proposing a set of additional rules barring crypto custodians from using investor assets for the “benefit of another client or other persons.”
Citing investor protection concerns, the draft regulations also prohibit these dealers from extracting benefits for their own, such as lending clients’ fiat or crypto holdings to earn interest.
For this purpose, the SEC requires clients’ assets to be ‘reconciled’ every business day to ensure accurate and updated records of crypto dealers.
The only exception to this blanket restriction is to allow crypto custodians to deposit clients’ fiat money with commercial banks. In such a case, business operators and crypto investors may agree on a specified interest rate not exceeding the banking rates.
“Withdrawal and transfer of fiat money from the accounts opened for the benefit of clients shall comply with the principles for decentralized approval authority, multi-sign approval authority, and check and balance, in the similar manner as custody of digital assets,” the proposal reads.
Once approved, Thai crypto firms have 30 days to adjust their policies in order to comply with the new regulations, according to the SEC.
This year, Thailand’s Securities and Exchange Commission has published a series of new regulations for crypto businesses, some of which were restrictions that have sparked public outrage.
The current rules already require crypto exchanges to share the information of users with regulators, whenever funds are transferred between firms, to curtain a growing number of illicit activities stemming under the guise of the global cryptocurrency industry.
Earlier in February, crypto fund managers and investment advisers were also required to apply for a licence to continue their businesses. As things stood before, money managers trading assets that fell outside the legal definition of securities, futures contracts or equivalent financial instruments were not subject to the SEC supervision. Investors in crypto funds managed by unregulated portfolio managers also did not enjoy the protection of investor compensation funds.
While crypto exchanges operated under the SEC radar, investors had little guidance on portfolio management business. Thailand now wants to increase oversight of cryptocurrencies and digital assets by tweaking asset management rules in the Thai crypto-related laws.
The Southeast Asian nation has already taken steps toward the adoption of cryptocurrencies, rolling out regulations and guidelines to welcome the business and opportunities that blockchain brings. It has also issued improvement orders for Bitkub and other Thai cryptocurrency exchanges after users were blocked from trading during significant price spikes in January.
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