The SEC expects to issue the regulatory framework over the next two to three weeks to supervise funding raised via ICOs and cryptocurrency, SEC Secretary-General Rapee Sucharitakul said yesterday (Feb 19) after a joint meeting with representatives from the Finance Ministry, the Bank of Thailand, Stock Exchange of Thailand and the Anti-Money Laundering Office, chaired by Deputy Prime Minister Somkid Jatusripitak.
“The regulations to supervise ICOs and transactions will be handled by the SEC, thus any companies that want to raise funds by offering ICOs to investors or companies that operate ICO trading are required to ask permission from the SEC,” he said.
Firms that trade ICOs are also required to disclose information showing the fundraising has no connection to money laundering and does not intend to deceive investors.
These companies are also required to educate investors, said Mr Rapee.
Although the government has yet to institute a law governing cryptocurrencies, the SEC has been granted full authority by the Finance Ministry to supervise such digital assets.
He also warned that ICOs and cryptocurrencies are not suitable for small investors.
“Those invited to invest in digital assets must study the investment thoroughly, including the assets, business operations, investors’ rights and tokens received from investment,” said Mr Rapee. “Some opportunists may float business projects by raising funds through this new technology, which is their selling point.”
Mr Rapee said the SEC’s study of ICO investment indicates 95% of ICO investments are deemed to be failures, with the remaining 5% reaping considerably high returns.
The SEC said the success of ICOs as an investment are difficult to gauge because startups have no track records and can be disrupted by technological changes, causing extreme rates of failure.
ICOs see a company, usually a tech startup, issue digital tokens, typically in exchange for a cryptocurrency such as bitcoin or ethereum.
Tokens can be used to buy future services from the issuer or can be sold to ostensibly reap a handsome return.
There are many returns that can be derived from ICOs. These could be in the form of a utility such as a coupon used to buy products or services, the right to own a specific asset or the right to receive revenue or profit-sharing without engaging in day-to-day operations.
The news follows Finance Minister Apisak Tantivorawong on Feb 8 confirming that the Thai government will not ban cryptocurrency trading, but assured that a regulatory framework to govern digital currencies would become clearer within a month.
Speaking at the “Thailand Takeoff 2018” seminar hosted by Post Today, Mr Apisak said that regulators could not stop the use of virtual currencies but would have to regulate and control them in an appropriate manner.
Recent wild swings in Bitcoin’s trading value has prompted Prime Minister Gen Prayut Chan-o-cha to instruct the Finance Ministry to educate people about the risks of investing in virtual currencies, while the central bank, SEC, Finance Ministry and Anti-Money Laundering Office (Amlo) agreed to set up a working panel tasked with considering potential measures to regulate digital currencies. (See story here.)
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