As of 2020, the Securities and Exchange Commission (SEC) of Thailand plans to amend the current royal decree on activities involving digital assets, promising to be more flexible to stimulate sector growth.
According to what has been reported, Thailand seems to have expressed its opinion regarding the regulation in the crypto field, stating that it wants to modify the decree that came into force on May 14th, 2018, with the objective of protecting investors from unnecessary risks, while accepting the possible increase in digital assets.
In this regard, here is how the SEC Secretary-General, Ruenvadee Suwanmongkol, described the new intentions of the regulators on the crypto matter for the new year:
“The regulator must be flexible to apply the rules and regulations in line with the market environment. For example, laws should not be outdated and should serve market needs, especially for new digital asset products, and be competitive with the global market. We need to explore any possible obstacles.”
The current decree covers the entire crypto sector: from cryptocurrencies and digital tokens to any other electronic data unit. This includes related activities such as exchanges, brokerage firms, resellers and token service providers (or ICO – Initial Coin Offering platforms).
Thailand and the relationship with digital assets
At the beginning of 2019, the Thai SEC also announced the issuance of crypto licences on its territory.
Specifically, four licenses were issued on six requests for operating as crypto-exchanges, precisely to Bitcoin Co, Bitkub Online Co Ltd and Satang Corporation Co Ltd, as well as a crypto broker and dealer license for Coins TH Co Ltd.
To date, out of these licenses, it appears that Bitkub Online Co Ltd and Satang Corporation Co Ltd continue to operate, while Bitcoin Co closed its crypto exchange in August.
Not only that, two other companies are also operating in Thailand but seem not to have started any operation yet and are Bitherb Co Ltd (bitherb.net) and Huobi Thailand Co Ltd.
With the purpose of protecting investors from the risks of fraud, the royal decree speaks clearly: there would be, in fact, a fine of at least 500,000 baht for sellers of unauthorised digital tokens and for those who set up unauthorised seminars, with additional penalties of imprisonment for up to two years.
At the same time, even for investors, the royal decree provides for taxes on digital trading. In fact, investors are subject to 7% VAT and 15% withholding on capital gains and returns on investments in crypto. Whereas retail investors will be able to avoid paying VAT if they use exchanges for trading otherwise they will have to pay it even if they do not generate capital gains.