In an ongoing effort to create a regulated crypto market for the general public, the Thailand Securities and Exchange Commission (SEC) has announced a ban on the use of cryptocurrencies for payments. At the same time, the Commission has proposed a new rule that requires the disclosure of information about the quality of service and IT usage of crypto firms, including brokers, exchanges and dealers.
According to the notice issued by the Thai SEC, businesses in the region have been advised against accepting crypto payments from April 2022 after discussing its implications with the Bank of Thailand (BOT).
The joint study conducted by the BOT and the SEC concluded that:
“[Crypto payments] may affect the stability of the financial system and the overall economic system, including risks to people and businesses.
Some of these risks highlighted by the SEC include loss of value caused by price volatility, cyber theft, money laundering and personal data leakage. Once implemented, Thai businesses will no longer be able to advertise accepting crypto payments and establishing systems, tools, and wallets to facilitate crypto transactions.
Companies found in non-compliance with new crypto laws will be subject to legal action, including temporary suspension or cancellation of services:
“However, the BOT and SEC, along with other government agencies, recognize the benefits of technologies behind digital assets such as blockchain and value and support the use of technology to drive innovation.”
Additionally, the Thai SEC’s proposal aims to further ensure investor safety by assessing the quality of services provided by crypto firms. According to a rough translation, the SEC offers operators of digital assets to:
“Prepare and deliver [service quality and system capacity utilization reports] to the SEC office on a monthly basis on the 5th day of the following month.
Along with sending monthly reports to the Thai SEC, the proposal also orders crypto firms to disclose the reports on their official website within the same time frame.
A graph shared by the SEC further highlighted various complaints received over the past 12 months regarding system failure, services not meeting desired conditions, purchases and others. Based on the data, Thai investors faced the most significant issues related to purchases, which could be one of the main reasons for the ban on crypto payments.
As Cointelegraph previously reported in December 2021, the Thai government has confirmed that it is working on preparing a new regulatory framework by setting “red lines” for the crypto industry.
Related: Thailand Reportedly Waiving 7% Crypto Tax for Traders on Authorized Exchanges
In the first week of March, the Thai Ministry of Finance reportedly eased crypto tax regulations in a bid to promote investments in digital assets.
According to a Cointelegraph report on the matter, the new tax policy exempts crypto traders from 7% Value Added Tax (VAT) when trading on authorized exchanges. In addition, the revised tax policy will also allow traders to offset their annual losses against the gains from their crypto investment across multiple digital assets.
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Thailand’s SEC Bans Crypto Payments, Seeks Disclosure Of System Failure From Exchanges
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