Thailand SEC bans crypto exchanges from lending and staking services

The move follows similar regulations in Singapore

In a move to safeguard investors and regulate the booming cryptocurrency industry, Thailand's Securities and Exchange Commission (SEC) has announced a ban on crypto exchanges offering lending and staking services. The decision comes as part of the country's strategy to prioritize investor protection in the rapidly evolving crypto landscape.

The ban, which was unveiled following Singapore's similar action, prevents crypto exchanges from providing “depository services that offer returns to depositors and lenders,” effectively prohibiting both lending and staking services. The SEC aims to mitigate potential risks associated with these services and protect retail customers from financial harm.

To further enhance investor protection, the Thai SEC has mandated a trading risks disclaimer that must be prominently displayed for all users. The disclaimer emphasizes the high-risk nature of cryptocurrencies and urges users to thoroughly understand the potential risks before investing. It serves as a reminder to customers that they could potentially lose their entire investment, discouraging uninformed decisions.

Additionally, exchange operators are required to conduct investor suitability assessments to determine the maximum amount users can invest in crypto. This measure aims to prevent individuals from investing beyond their financial means, reducing the likelihood of significant financial losses and promoting responsible investment practices.

The SEC's latest move builds upon previous regulations that banned crypto payments while still permitting cryptocurrency investment as an asset. By implementing these stricter measures, the Thai authorities seek to strike a balance between promoting investment opportunities and ensuring financial safety for the public.

The new rules are set to take effect on July 31, giving exchange operators and investors time to adjust to the changes. It marks a significant step in the country's crypto policy landscape and indicates the authorities' proactive stance in addressing potential risks and challenges posed by the crypto market.

The decision by Thailand's SEC follows the footsteps of Singapore's Monetary Authority, which also recently banned lending and staking services offered by crypto exchanges. In response to past incidents like the FTX exchange collapse, where customer funds were misappropriated, Singapore now requires exchanges to move all customer assets into a Trust to prevent commingling and enhance fund security.

Overall, Thailand has a favorable stance on the crypto industry. Last year, Thai regulators decided to abandon plans for implementing a crypto tax. It was also announced that Thailand is set to grant more authority to its central bank in regulating cryptocurrencies.

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Written by Silvia Pavlof

Silvia has explored various forms of writing, ranging from content creation for social media to crafting movie scripts. Drawing on her experience as a journalist specializing in the gambling sector, she is currently investigating the impact of cryptocurrencies and blockchain on traditional gambling and iGaming.

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