Thailand’s First ICO Portal Awaits Approval From Govt. Agencies

by March 19, 2019

Thailand’s securities watchdog has approved the first initial coin offering (ICO) portal and is reportedly seeking to issue application norms for securities token offerings (STO) soon.

Thailand is finalizing its “first authorized ICO portal” and now needs final approval from the country’s Ministry of Commerce and other government bodies, according to SEC’s director of the fintech, Archari Suppiroj, as reported by Bangkok Post last Wednesday.

A foreign company is behind the authorization of this ICO portal, after seven or eight companies had previously consulted with the SEC over operating the portal, she added.

The ICO portal apparently aims to scrutinize ICOs, prove smart contract source codes and ensure sound KYC processes. Ms. Archari further said that the first ICO portal will be open for public offering in the “near future”, under the royal decree on digital asset.

The Securities and Exchange Commission (SEC) of Thailand is currently considering a number of issues including sales of security tokens that would be regulated separately under the Securities and Exchange Act and that STO holders need to apply for a licence.

“In the future, the SEC will issue a criteria that allows companies to apply tokenisation to securities and other assets,” Archari continued. “This will help bridge the digital asset royal decree and securities law.”

Furthermore, in February, an amendment to the Securities and Exchange Act was approved by the country’s National Legislative Assembly, legalizing the issuance of tokenized securities such as stocks and bonds from entities outside the Thailand Securities Depository (TSD), owned by the Stock Exchange of Thailand.

The amendment enable investors to deposit their assets at any SEC-licensed securities depository centre. “The next step is for an issuer to offer security tokens in the primary market,” Archari told the Post.

The moves comes after SEC, in July 2018, introduced a regulatory framework for issuing and selling digital tokens through ICOs.

Besides, the release said that SEC will also issue regulatory rules to support tokenization and change the role of financial advisors, underwriters and other related parties.

According to Jirayut Srupsrisopa, co-founder and chief executive at Bitkub Capital Group Holdings, all assets can be tokenized and digitized using blockchain.

“The market has high potential to grow because the law has been set,” Jirayut said. “Thailand has a supportive environment where lawyers and regulators understand the new global movement [on virtual asset classes].”

SEC’s Moves

Thailand is among the initial countries in Southeast Asia to implement new law on cryptocurrencies to control and regulate its transactions and ICOs. A royal decree was enacted stipulating that cryptocurrencies and digital tokens are digital assets.

Since last year, the country has come forward to adopt more liberal stance on cryptocurrencies. For example, SEC Office initially has included seven cryptocurrencies into its initial list of approved cryptocurrencies, as on September 2018, including Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic, Litecoin, Ripple, and Stellar, a report stated.

Later, last month, the SEC has updated the list of cryptocurrencies eligible for ICOs. The regulator further said that it has approved only four currencies for further investments and ICOs namely Bitcoin, Ethereum, Ripple and Stellar, thus banning Bitcoin Cash, Etherium Classic and Litecoin.

Over time, more measures to control digital currencies were imposed by the Deputy Prime Minister Wissanu Krea-ngam in a move to combat terrorism financing.

Wissanu raised the alarm amid growing concerns over money laundering. He said, despite measures such as the 2018 executive decree on digital asset businesses, “the laws need to be amended in the future so that we can better keep up with technological changes.”

The government also amended its tax law so it can extract some revenue from the nascent crypto industry. Thailand’s military regime came up with a plan last year, stating that, investors will have to pay 7% value added tax on all crypto trades, and a 15% capital gains tax on their returns.

In the interim, more emerging regimes in the region have come on track with Thailand to develop regulatory guidelines for cryptocurrencies. Philippines for example, announced new regulations to govern crypto assets. The new regulations is said to cover areas around the acquisition of cryptocurrencies, including utility and security tokens and aimed to protect investors and promote innovation.