Thailand’s ICO Regulatory Framework a Template for Others to Emulate
Thailand is quickly establishing itself as a major cryptocurrency player in the ASEAN region with its innovation-friendly stance towards regulations. The country has taken a proactive approach to cryptocurrency regulations which is radically different from many other countries which are viewing this new asset class under the lens of old financial laws. Thailand has joined other Asian crypto powerhouses such as Singapore and South Korea which are actively encouraging the cryptocurrency market and giving it a chance to prosper within their boundaries.
Last month, the Securities and Exchange Commission (SEC) of Thailand — the country’s securities regulator — announced plans to certify the first Initial Coin Offering (ICO) portal. A TNW report says that these portals will be used to vet ICOs for legitimacy, protect investor interests and apply strict KYC policies. The Commission is assessing approval requests from six businesses which want to operate as digital asset exchanges. It is also likely that we may see the first regulated token offering sometime in December, although it is not confirmed yet.
Thai ICO Guidelines
The announcement of the ICO portal follows the draft regulatory framework for token offerings which took effect earlier this year. At the time, the Thai SEC had asked ICO issuers to take approvals from SEC-approved ICO portals. The SEC further added that these ICO portals need to be Thailand-based and have a working capital of 5 million Baht (approx. USD $153,000). The SEC had also mandated that ICO issuers need to be established under the Thai legal jurisdiction with a clear business plan and rights for token holders.
Moreover, they had also limited the amount of money retail investors can put in at 300,000 Baht (approx. USD $9,180). There were no such as restrictions for institutional investors, high net worth individuals, venture capitalists and private equity firms. In addition, ICO issuers were asked to accept money only in the fiat currency Baht or the seven approved cryptocurrencies (Bitcoin, Ripple, Ethereum, Stellar, Bitcoin Cash, Litecoin and Ethereum Classic).
In fact, Thailand has jumped on to the STO bandwagon as well. The Thai SEC has been considering various STO classifications for a regulatory framework around these assets. They also made it clear that any Thai-related STO offered in international markets would be considered a violation of their Digital Asset Act. The regulators are still trying to figure out issues such as share ownership, voting rights and dividends when it comes to regulating these types of token offerings.
The Thai SEC is also conducting a public hearing to relax rules around pre-sales and private sales. The regulatory body is considering the approval of private digital token sale processes without the need to submit registration statements and draft prospectus.
The Best Approach: Regulate, But Don’t Stifle
The regulatory environment around ICOs in the kingdom has demonstrated that the regulators understand the unique requirements of this nascent cryptocurrency market. Like its counterpart in the US, the Thai SEC doesn’t seem to be in a hurry to classify cryptocurrencies as securities or some other traditional financial instrument. While allowing ICOs to foster, it is also protecting investors from scams through strict KYC procedures and limits on investing. In addition, it is also ensuring that investors understand the risks of investing in a token so early in its lifecycle.
The Thai approach is an extremely proactive one, in stark contrast to the conservative route taken by countries such as China and India. Not surprisingly, the countries which are heading the blockchain revolution are those which are not burdened by regulatory overreach. Countries cannot expect regulations to keep pace with new technology. A good regulatory framework is one that allows enough breathing room for new innovation and technology to flourish, and evolves with time. Thailand wants to become a hub for token innovation and at the same time protect investors through a robust screening process for ICOs.
The message from Thai regulators to token issuers is clear: You are welcome to conduct ICOs, as long as they are within our regulatory framework.
About ICOMain.io:
ICOMain.io is a full-service solutions provider for all the things needed to complete a successful ICO. Our comprehensive solutions are designed for companies looking to tap into the immense potential of blockchain and launch their ICO in the most efficient manner possible. Our team comprises of seasoned experts who have a wealth of experience in advising ICOs and is complemented by our cutting-edge technology infrastructure. We are dedicated to understanding their clients’ needs who may come from a diverse range of industries. We are also the first sponsor firm for the Gibraltar Blockchain Exchange (GBX) that aims to be a world-leading, institutional-grade token sale platform and cryptocurrency exchange.
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