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"

Marshall Islands Reportedly Getting Close to Launching its 'Sovereign' Cryptocurrency

  • Island country of Marshall Islands is reportedly getting closer to launching its own digital currency, called the Sovereign, or "SOV."
  • This, despite concerns raised earlier by the IMF and the US Treasury Department regarding the safety issues related to launching the cryptocurrency. 

The Marshall Islands, an island country and a United States associated state, is reportedly planning to launch its own cryptocurrency, called Sovereign (SOV), at some point during this year.

However, there is currently a considerable amount of ongoing development work that needs to be completed before Marshall Islands’ cryptocurrency can be introduced. This, according to a recent report published on the Taipei Times, which also confirmed that US financial regulators had expressed concerns regarding using a national cryptocurrency.

SOV Could Launch "This Year"

It now appears that Marshall Islands’ government is moving forward with its plans as Barak Ben-Ezer, the CEO at Neema, an Israel-based firm that is helping to launch the digital currency, remarked:

We plan to launch SOV this year.

One of the main problems previously cited for introducing a sovereign cryptocurrency is that digital assets have been highly volatile and can pose serious risks to investors. Commenting on the development work being done before launching the SOV, or the Sovereign, Ben-Ezer stated: 

We are working day and night to prepare the foundations of the SOV initial coin offering, with the goal of being ready to launch once positive momentum is back in the markets.

SOV Will Only Be Launched Once "Stakeholders Are Convinced It's Ready"

He also mentioned: “It will be done once all stakeholders are convinced that SOV is ready, risks have been mitigated and momentum is building.” Currently, Marshall Islands’ government and Neem are reportedly working on addressing several regulatory requirements outlined by American financial regulators.

There are also logistical and technological factors that need to be considered before introducing a national cryptocurrency, which are currently being reviewed by Neema and the authorities in the Marshall Islands.

Last year, the Pacific island nation with a population of around 55,000, passed legislation that suggested developing a national cryptocurrency and using it as legal tender. Soon after the plan to use a state-backed crypto was proposed, it was heavily criticized by the US Treasury Department, the International Monetary Fund (IMF), and several bank officials working in the Marshall Islands.

Concerns About "Anonymous" Nature Of Cryptocurrencies

Bank officials said that launching the Sovereign could adversely affect the island’s existing financial system as it would allow for illicit activities such as money laundering. However, Ben-Ezer has noted that the cryptocurrency is being developed carefully, with these risk factors being considered, and that the SOV will be one of the world’s safest monetary systems.

Moreover, the US Treasury has expressed concerns regarding “anonymous [crypto]currencies, such as Bitcoin, [which] are often used for illicit purposes by people who want to conceal their identity,” Ben-Ezer mentioned.

But Ben-Ezer also clarified that every account that is opened using the SOV will have to go through mandatory know-your-customer (KYC) checks. New accounts will also have to be verified against the US Treasury’s Office of Foreign Assets Control (OFAC), “so only legitimate, law-abiding people can use the SOV,” Ben-Ezer said.