Thailand’s Financial Regulator Announces a Regulatory Framework for ICOs

Siamak Masnavi

According to the Bangkok Post, Thailand's financial regulator, the Securities and Exchange Commission (SEC), has released a regulatory framework for issuing and selling tokens through initial coin offerings (ICOs) that will be effective from 16 July 2018.

When the Thai SEC held a focus group on cryptocurrency regulations on 21 May 2018, the hearing focused on fundraising through ICOs. The focus group decided that ICOs should only be allowed to raise funds through the national currency, the Thai Baht (THB), Bitcoin, Ether, and perhaps a few cryptocurrencies deemed to have "enough liquidity" and not associated with money laundering. ICO projects would also need to ensure that they are complying with KYC and AML rules. The ICO Portal of Thailand would not list any international ICOs. And finally, the Thai SEC would not get involved with ICOs for stablecoins, and regulations for these would instead be dealt with by the central bank, the Bank of Thailand (since there was no price volatility to worry about with stablecoins).

Here is a quick summary of the new guidelines:

  • An ICO's portal must be pre-approved by the Thai SEC.
  • ICO issuers must be Thai companies with a registered capital of at least 5 million bahts (around $150,000). The companies must have clear business plans and clear rights for digital token holders.
  • While there is no limit on how many tokens can be sold to an institutional investor, a venture capital firm, a private equity firm, or an ultra-high-net-worth (UHNWI) individuals, it is not allowed to sell more than 300,000 baht (around $9,000) worth of tokens for a single ICO to a single ordinary retail investor.
  • ICO issuers may only accept payments in Thai Baht or one of these seven cryptocurrencies: Bitcoin, Ether, XRP, Bitcoin Cash, Ethereum Classic, Stellar Lumens and Litecoin. 
  • An ICO's management structure and staff must be appropriate for business operations. 
  • An ICO is required to disclose its source code, investment prospectus, and financial statements.

Rapee Sucharitakul, the Secretary-General of the Thai SEC, made the following comment:

“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. After the SEC approves an ICO portal, the token will be assessed for approval.”


Featured Image Credit: Photo by "Michael Rehfeldt" via Flickr; licensed under "CC BY 2.0"

Brazilian Banks Could Soon Cut Off Banking Support for Local Crypto Exxhanges

Two large commercial banks in Brazil, Itaú and Banco Bradesco, have started refusing to abide by an agreement preventing them from closing the accounts of local cryptocurrency exchanges.

According to Hispanic crypto news outlet Criptonotícias,  Banco Bradesco, one of Brazil’s largest commercial banks, was the first to refuse to abide by an agreement that prevented the financial institution from cutting off local cryptocurrency exchanges.

Brazil’s Administrative Council for Economic Defense (CADE) ruled, in December 2019, that banks were somewhat justified in shutting down the accounts of local cryptocurrency exchanges. The financial institutions argued there is no strict know-your-customer (KYC) compliance among exchanges, which means there are money laundering risks.

In its decision, CADE wrote:

There is rationality in banks' decisions to close or refuse to open accounts [for cryptocurrency exchanges], and this rationality is not conditioned on any motivation for such attitude.

As a result, CADE ruled banks could shut down the accounts of local cryptocurrency exchanges as there was no evidence pointing to the move being antitrust crimes. In response to the ruling, the Brazilian Association for Cryptocurrency and Blockchain (ABCB) filed an appeal with 14 arguments against the decision. Among these there were allegations of “obscurity,” “omissions,” and “contradictions.”

Banco Bradesco now reiterated that cryptocurrencies pose money laundering risks, and is as such choosing not to abide by any demands from the ABCB regarding cryptocurrency exchange accounts, and attacking the organization’s appeal. Banco Itaú, another major Brazilian bank, is also arguing against the appeal.

Cryptocurrency exchanges in Brazil have been fighting commercial banks for years now, with the battle seemingly having no end in sight. Despite the banks’ attitudes Brazilian people appear to be pro-crypto, as the city of Fortaleza, capital of the state of Ceará, has announced it’ll be selling transport tickets for BTC.

Last year, Brazil’s central bank adopted guidelines from the International Monetary Fund (IMF) and started officially recognizing cryptocurrencies like bitcoin as assets.

Featured image via Unsplash.