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2024 Updates to Thailand’s ICO Crypto Regulations
28/05/2024
Thailand’s capital markets have witnessed a transformative shift in recent years, with the emergence of initial coin offerings (ICOs) as an innovative fundraising tool. As the blockchain industry continues to grow, the country’s Securities and Exchange Commission (SEC) has taken proactive steps to improve regulatory oversight and safeguard investor interests.
In March 2024, the Thai SEC published amendments to its Notification on Public Digital Token Offerings, introducing a framework to govern the ICO ecosystem and promote a more transparent and secure environment for all stakeholders.
Key points
- The Thai Securities and Exchange Commission (SEC) introduced amendments to its regulations governing initial coin offerings (ICOs) in March 2024, which took effect on April 16, 2024.
- The amendments aim to strengthen governance, enhance investor protection, promote transparency and accountability, and foster responsible growth of the ICO ecosystem in Thailand.
- Key changes include requirements for annual audits, conflict of interest management, improved voting rights for token holders, stricter advertising guidelines, and mandatory risk disclosures.
- Advertisements are prohibited from guaranteeing returns or making misleading claims, and must include risk warnings and contact information.
- The revised regulations are expected to boost investor confidence, improve issuer accountability, promote truthful marketing, and align Thailand’s ICO market with global best practices.
What are the Amendments to ICO Regulations in Thailand?
The Notification re: Public Digital Token Offering to strengthen governance for initial coin offerings (ICOs), which took effect on April 16, 2024, introduced several significant changes to ICOs in Thailand. The main changes are as follows:
Strengthening Checks and Balances
The revised regulations now require digital token issuers to implement comprehensive checks and balances to protect investor rights. This includes an annual audit requirement and measures to prevent and manage conflicts of interest, which must be clearly disclosed in the ICO filing documents. Additionally, project-related decisions must be approved by the issuer’s board of directors, who are responsible for the accountability of such decisions.
Improved Voting Rights for Digital Token Holders
The SEC has introduced new rules concerning voting rights and procedures for digital token holders. These regulations specify the procedures for soliciting votes, the rationale behind vote requests, and the criteria for determining voting outcomes. However, the new rules do not apply to real estate-backed tokens or infrastructure-backed tokens.
Enhanced Advertising Guidelines
The SEC has revised its advertising guidelines to ensure that investors receive essential information. The updated rules require all ICO advertising to be fair, informative, and free from misleading content. Advertisements must include appropriate risk warnings and clearly state the source of any claims made. Issuers are responsible for strictly supervising and ensuring compliance with these regulations by those who create advertisements on their behalf.
Mandatory Risk Disclosures and Limitations on Guaranteed Returns
The new guidelines further require that ICO advertisements must include prominent warnings about investment risks and provide contact information for further inquiries. Advertisements are also prohibited from guaranteeing returns from digital token investments, as this could lead to misunderstandings or discrepancies with the information submitted to the SEC in filing statements and prospectuses. If expected returns are advertised, the calculations must be backed by adequate supporting and risk information for each calculation model.
Why did the SEC Release these Amendments?
The SEC’s decision to amend the ICO crypto regulations reflects its commitment to creating a safer and more transparent environment for the digital token market. The key objectives behind these changes include:
- Enhancing Investor Protection: By introducing stricter governance requirements, voting rights, and advertising guidelines, the SEC aims to safeguard the interests of investors and build their confidence in ICOs as a fundraising tool.
- Promoting Transparency and Accountability: The new regulations mandate greater disclosure of information, conflict of interest management, and board-level oversight, fostering a more transparent and accountable ICO ecosystem.
- Fostering Responsible Industry Growth: The SEC’s goal is to facilitate the responsible development of the ICO market in Thailand, ensuring that it aligns with global best practices and regulatory standards.
- Strengthening the ICO Ecosystem: These amendments are designed to create a stronger and trustworthy ICO environment, ultimately supporting the broader growth and adoption of digital assets in Thailand.
What does this Regulation Mean for the Thai ICO Crypto Market?
The introduction of these revised ICO regulations is expected to have a significant impact on the Thai digital token industry. Some of the key implications include:
Increased Investor Confidence
The enhanced governance, transparency, and investor protection measures are likely to boost investor confidence in the Thai ICO market, attracting greater participation from investors.
Improved Issuer Accountability
The new requirements for issuer accountability, such as annual audits and board-level approvals, will hold digital token issuers to a higher standard of responsibility, potentially removing less credible companies.
Stricter Advertising Scrutiny
The tightened advertising guidelines will compel issuers to be more cautious and truthful in their marketing efforts, reducing the risk of misleading claims and promoting a more informed investor base.
Harmonisation with Global Regulatory Trends
By aligning its ICO regulations with international best practices, Thailand is positioning itself as a well-regulated and attractive destination for digital asset-related activities, potentially enhancing its competitiveness in the global fintech landscape.
How can Belaws help?
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Frequently asked questions
What’s new with ICOs in Thailand?
Thailand’s Securities and Exchange Commission (SEC) recently updated the rules for ICOs (Initial Coin Offerings). This happened in March 2024 and aims to make things safer and clearer for everyone involved.
Why this new ICO regulation?
The SEC wants to protect investors and make sure ICOs are done responsibly. They also want Thailand’s ICO market to be on par with international standards.
What are the ICO regulation key changes?
- Stronger checks and balances: ICO companies need to have annual audits and plans to avoid conflicts of interest. They also need clear rules for how they make decisions.
- More voting rights for token holders: People who buy tokens will have a clearer say in how the ICO company is run (except for some real estate and infrastructure projects).
- Truthful advertising: Ads for ICOs can’t promise guaranteed returns or mislead people. They must also clearly explain the risks involved.
What does this mean for a crypto investor?
- If you’re considering investing in an ICO: You can be more confident that the companies are following the rules.
- If you’re running an ICO: You’ll need to be more transparent and accountable to investors.
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