Thailand’s Securities and Exchange Commission (SEC) banned domestic cryptocurrency entities from providing participation and lending services to customers. The ban is intended to protect traders and the public from the risks associated with such activities.
The Southeast Asian country has been active in the digital asset scene of late. At the beginning of the year, local authorities showed the intention to start taxing transactions with bitcoins and alternative currencies, while later, they banned the use of cryptocurrencies for payments.
Thailand’s next step
According to a press release, Thailand’s SEC banned local cryptocurrency trading operators from offering or supporting digital asset depository services, such as participation and lending. The watchdog hoped the move would ensure maximum protection for local investors and minimize risks for the general public when interacting with the sector.
The regulator said enforcing this ban is essential as many foreign companies have experienced liquidity problems in recent months. An example is the DeFi platform and one of the largest cryptocurrency lenders: Celsius Network.
In June, it halted withdrawals, exchanges and transfers between accounts, citing “extreme market conditions.” A month later, the company filed for Chapter 11 bankruptcy protection in the Southern District of New York.
Another cryptocurrency lending platform that is part of this list is Babel Finance, which paused all withdrawals due to liquidity issues. Soon after, he was rumored to have defaulted on his debt after reaching agreements with major clients and counterparts.
Apart from foreign organizations, Thailand also has a representative among struggling crypto entities. In July, digital asset exchange Zipmex suspended customer withdrawals on its platform, while a week later, it applied for a moratorium to prevent its creditors from making claims for the next six months.
The Cryptographic Environment in Thailand
Last year, Thai authorities seemed determined to boost the development of the local digital asset industry. In September, the Tourism Authority of Thailand (TAT) wanted to create a utility token called TAT coin, which could enable the transfer of vouchers and help tour operators gain more liquidity.
At the time, Mr Yuthasak, the agency’s governor, said digital assets were “changing the world” and could help Thailand bounce back after the COVID-19 pandemic crippled the domestic tourism sector.
In 2022, the Asian nation inquired about what kind of taxes it should apply to cryptocurrency mining, trading and transactions. After several considerations, it scrapped its intentions to implement a 15% withholding tax on digital asset transactions.
Another important amendment occurred in early April when legislators forbidden the use of cryptocurrencies as a means of payment for goods and services.
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