Thailand’s Securities and Exchange Commission has banned dealing in some cryptocurrencies and non-fungible tokens.
The announcement, which was made on Saturday, prohibits digital exchanges from handling four types of tokens:
“Meme tokens” that the regulator characterises as having no clear purpose, no underlying value and whose prices fluctuate due to social media commentary;
“Fan tokens” that exist only due to the fame of influencers;
Non-fungible tokens (NFTs), the emerging application of blockchain to signify ownership of digital assets;
Tokens issued by digital asset exchanges or related persons.
“The Securities and Exchange Commission (SEC) Board has approved the new rules that prohibit digital asset exchanges from providing services in relation to utility tokens and certain types of cryptocurrencies. The rules also specify that the exchanges set a requirement to be imposed in the event that digital tokens issued by their own exchange or related persons are listed on the exchange. In this regard, the token issuer who fails to comply with the white paper and relevant rules in substance could risk having such tokens delisted from the exchange. This new regulatory guideline aims to enhance protection of digital asset traders’ interest,” the announcement said.
The rules require digital exchanges to stop dealing in the banned token, or face having them yanked from their services by Thai authorities.
Under the new rule, a digital asset exchange has to set the requirement that the digital token issuer who is the exchange itself or related person comply with the white paper and relevant rules in substance. Failure to do so could result in the delisting of such digital token from the exchange.
The exchanges are required to comply and revise their listing rules in accordance with the Notification within 30 days from the effective date thereof.
Digital exchanges are the target of the new rules. Individual Thais remain free to use any of the abovementioned tokens if they wish to and can find someone willing to handle their trades.
But the intent of the rules is to make it hard for exchanges that handle the trades to operate within Thailand. The final item on the Commission’s list — tokens issued by exchanges — is designed to make it hard for crypto-dealers to create tokens they use to trade among themselves, or that their customers can use to make payments for exchanges’ services.
The Commission’s decision is seen as likely to impact even relatively mainstream tokens like Dogecoin — which has recently been the subject of odd Tweets by Elon Musk — along with other less-prominent coins. The policy motive behind the decision is a desire to reduce opportunities for money-laundering, and to ensure the stability of the nation’s financial system.
NFT has recently become a drive for the cryptocurrency market, and it’s believed to have the potential of limiting the market’s volatility. On the other hand, Dogecoin, which Musk seems to single handedly promote will be hardly hit as it has become the most famous meme coin. Thailand is a country of interest that wields a considerable power to impact the cryptocurrency market. The decision sends a signal that the government may make further move to shut down crypto operations in Thailand, following China’s steps.