Thai SEC wants to regulate decentralized Finance

Thailand’s financial market supervisory authority now shows great interest in decentralized financing

As the Bangkok Post reported today, the Thai Securities and Exchange Commission will focus more attention on the country’s DeFi sector. The Commission released a statement on Sunday saying that any DeFi activity could soon be subject to compulsory licensing by the regulator.

“The issuance of digital tokens must be approved and supervised by the Securities and Exchange Commission, and the issuer is required to disclose information and offer the coins through the token portals licensed under the Digital Assets Regulation“, according to the supervisory authority.

The announcement essentially means that any DeFi projects involving the issuance of virtual tokens would have to require SEC approval. The regulator’s action was triggered by a DeFi project called Tuktuk Finance, which recently debuted on the Bitkub chain. The Bangkok Post reports that the price of the platform’s own token TUK rose to “several hundred US dollars” at launch before crashing to $ 1 in a matter of minutes.

The erratic price fluctuations observed on Sunday are said to have alarmed the Commission. It is worth noting that this is the first time the regulator has formally addressed a DeFi issue. Thailand’s DeFi sector has been largely quiet, with uncertainty over which regulator has authority over the market.

Reaction to the announcement has so far been calm and positive, with a key industry official describing it as appropriate. Niran Pravithana, managing director of AVA Advisory, is among the few who have commented on the matter and welcomed the move, given the fact that there are criminal parties out there issuing fraudulent tokens and even manipulating the prices of the tokens.

Tokenine founder Dome Charoenyost praised the authority’s action, noting that some areas of DeFi would not be adequately regulated. He added that the decision was legal because the law requires the commission to have oversight of token issuance.

DeFi regulation has been a stumbling block in many countries outside Asia due to the various underlying new financial technologies. It is feared that regulation of the sector in Thailand does not provide adequate investor protection. The majority of DeFi transactions in the country are not managed by local firms. In addition, most Thai DeFi developers are currently working anonymously.

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