Security

Thailand’s Government Regulates ICOs

Where Will the Regulation Take the Crypto-Industry in the Country?

Thailand joined the few countries whose government took a step forward to devise a clear set of regulations for cryptocurrency based startups.

Bangkok Post report states that the Thai Securities Exchange Commission (SEC) announced the regulatory framework for startups conducting crowdfunding campaigns in the country, which will take effect on July 16th.

The Rules

All companies issuing ICOs have to be registered in the country with the base capital of 5 million Baht ($150,625). The framework goes on to obligate the company to have the adequate personnel and management structure for conducting the business disclosed in the offering document (offering memorandum).

Furthermore, the SEC will have the right to evaluate ICO issuers’ business plans and the distribution of tokens. Companies will be bound to enable the government officials to perform inspections that will ensure that the coding matches the information disclosed.

When the firm which wants to do an ICO meets the requirements, it becomes the SEC approved issuer of the cryptocurrency token and may progress to the crowdfunding phase.

Every approved company is permitted to offer the unlimited amount of their crypto assets to institutional investors, venture capital and private equity firms and ultra-high-net-worth individuals. However, there is a token value cap of 300,000 Baht ($9,050) for retail investors.

One of the most important ordinances states that the company administering the ICO may receive payments in Thailand’s native currency, Baht, or one of the 7 approved cryptocurrencies. The parameters by which Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Bitcoin Cash (BCH), Ethereum Classic (ETC), Stellar (XLM), and Litecoin (LTC) were selected to be the methods of ICO crypto-payments weren’t announced, the motivation behind the inclusion of ETC over, for example, NEO or Cardano (ADA) can only be speculated on.

What is the Government’s Opinion?

The SEC secretary-general, Rapee Sucharitakul stated that “the SEC is pleased to immediately discuss details with those who would like to be approved as ICO portals in order for them to be prepared for the regulatory framework,” before explaining the approval system: “After the SEC approves an ICO portal, the token will be assessed for approval.”

“Despite the regulatory framework standardisation of ICOs and enhancement of investors’ protection against fraud, an approved sale of digital tokens does not guarantee the success, price or return from fund-raising projects,” the secretary-general disclosed and went on to conclude that “investors can still experience losses or limited choice in token swaps, so investors should study the information thoroughly and accept investment risks before making an investment.”

To learn not to fear all of the government’s regulations is the necessary step for the average cryptocurrency investor on his path to achieve the correct market judgment ability.

By deciding to regulate, and thus legalize the new way of fundraising for cryptocurrency projects, Thailand’s government showed that they share the belief in the young industry and want to make the safest possible environment for the investors.

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Luka Kapetanic

An ex-restaurant business owner turned cryptocurrency fanatic, with over 12,000 followers on investfeed.com. Miner, Investor, trader and, above everything else - a writer, with coinlive.io, and cryptodigest.com in his jobs portfolio.

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