Thailand SEC Released New Capital Requirements for Digital Asset Business Operators

Thailand's SEC (Securities and Exchange Commission) has approved new capital requirements for digital asset business operators – including trading centres, brokers and trading firms. The move is aimed at increasing the protections available to investors and the credibility of digital asset businesses, the SEC said.

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Digital asset business operators who maintain customer assets will have to hold paid-in capital amounting to THB 100 million (USD 2.7 million), up from THB 50 million currently. Digital asset brokers and traders will have to hold THB 50 million, up from THB 25 million and THB 5 million respectively.

The SEC has also amended its rules for how digital asset businesses maintain their capital funds in hot and cold wallets, ensure business continuity, and protect investors' assets.

New licence applicants will have to meet the new requirements immediately once the new rules are gazetted, while existing digital asset business operators will have a one-year transition period.

Earlier this month, the SEC issued new rules requiring digital asset business operators to provide clients with training or test their knowledge on cryptocurrencies to ensure they understand the risks of investing in such assets.

Under the rules, which were approved in April and will take effect from 30 August 2022, institutional and other large or high net worth investors will be exempt from the requirement to undergo training and a knowledge test.

From 1 January 2023, digital asset business operators will also be required to also public disclose service quality reports – containing information on IT usage capacity, system failures, and service complaints – to enable investors to decide whether to use a business operator's services.

The requirement to produce service quality reports were proposed earlier this year as the SEC was also tightening its rules on the custody of client assets, to protect investors from fraud and misappropriation.