While the new rule can help improve traceability and accountability for digital assets in Thailand, where so-called mule accounts and financial fraud have become prominent, the details of implementation will prove crucial, said the Thai unit of the world’s largest cryptocurrency exchange Binance
“While many countries are adopting the Travel Rule, the exact design varies widely across jurisdictions. If the framework becomes overly restrictive, this may unintentionally undermine the open and decentralised nature of blockchain networks,” Nirun Fuwattananukul, chief executive of Binance TH by Gulf Binance, told the Bangkok Post.
The goal should be a balanced framework that strengthens compliance without stifling innovation, he said.
Many leading jurisdictions have adopted risk-based approaches that focus compliance efforts where risks are highest, while still allowing the technology to function as intended, said Mr Nirun.
According to the Securities and Exchange Commission (SEC), digital asset operators would be required to comply with the Travel Rule, a global standard designed to strengthen anti-money laundering safeguards and curb technology-enabled financial crime.
The Travel Rule is so named because it aims to to prevent illicit, anonymous, or untraceable crypto transactions by allowing certain identifiable data to “travel” with each transfer.
The proposal requires digital asset service providers to collect and transmit additional specific information about customers and transaction counterparties for transfers valued at 30,000 baht or more, aligning Thailand’s regulatory framework with international compliance standards.
The initiative aims to ensure that digital asset operators maintain sufficient data to support transaction monitoring and risk management, particularly in relation to money laundering.
The measure is intended to enhance the effectiveness of efforts to combat technology-related crimes, which have increasingly involved digital assets as a channel for illicit financial activity, noted the SEC.
KEY PRINCIPLES
Under the proposal, digital asset operators would be required to establish policies and procedures governing the collection and transmission of information for transfers conducted on behalf of customers.
They must also gather transaction details as well as identifying information about both customers and their counterparties.
All relevant transaction information must be retained for at least five years from the date of the transaction, allowing authorities and operators to conduct compliance checks and risk assessments when necessary.
When digital asset operators initiate a transfer, they must transmit the transaction details together with identifying information of the sender and the recipient to the receiving service provider at the time the transfer instruction is sent.
Digital asset businesses would also be required to establish risk management measures related to both sending and receiving digital asset transfers in accordance with regulatory requirements.
PREVENTIVE MEASURES
Pornanong Budsaratragoon, secretary-general of the SEC, said the proposed framework will enable digital asset operators to access data that is crucial for identifying suspicious transactions and preventing digital assets from being used in cybercrimes.
The measures would also improve authorities’ ability to trace and recover illicit assets, while helping prevent the digital asset market from being exploited as a channel for money laundering, said Mrs Pornanong.
The proposal represents a key element of the SEC’s broader strategy to strengthen oversight of financial intermediaries, she said.
“The approach focuses on preventive supervision, aiming to reduce risks before damage occurs by raising regulatory standards for digital asset businesses,” said Mrs Pornanong.
The SEC is inviting feedback from industry participants and other stakeholders for the Travel Rule. Interested parties can submit comments via online platforms or by email until March 25.
This marks another step in Thailand’s effort to enhance transparency and security in its rapidly expanding digital asset market while aligning domestic regulations with global anti-money laundering standards, she said.