The Securities and Exchange Commission (SEC) of Thailand has introduced new rules for crypto custodians or VASPs that provide crypto storage services.
According to these new rules, companies that offer crypto custody services are now required to implement a digital wallet management system in order to support efficient custody of digital assets and keys while ensuring the safety of clients’ assets. Furthermore, these entities should also implement a series of policies and guidelines relating to the management of digital wallets and keys, and they should ensure proper communication channels to clarify such policies, action plans and procedures, work supervision, and internal control to ensure compliance with the policies.
Additionally, the SEC will require crypto custodians to put in place policies and procedures for designing, developing, and managing digital wallets and keys. The authority will require crypto custodians to establish a contingency plan in the case of unforeseen events that could affect the wallet management system.
According to SEC representatives cited by cointelegraph.com, in the case of an event that can affect the security of systems related to digital asset custody, an audit of system security will be required as well as a digital forensic investigation. According to the same source, these new rules came into effect on 16 January 2023, and crypto custodians have six months to become fully compliant from the effective date.
A report from the Bangkok Post revealed that Thailand is looking to revise its crypto regulation by tightening the guidelines for the industry and focusing on investor protection. The same source highlights that the Thai Securities and Exchange Commission is working on a series of strict regulations on digital assets in the context of growing concerns about crypto advertising trends, and the collapses of FTX and Three Arrows Capital.
Some of the SEC’s primary focus points include investor protection, control over crypto advertising, prevention of conflicts of interest and cybersecurity. The SEC has put together a working committee that includes both officials and private stakeholders, with the goal of assessing and preparing any relevant amendments to existing regulations.
In response to the country's rapidly increasing need for mobile payments, ecommerce, and cryptocurrencies, Thailand and Hungary have signed a technical cooperation agreement to encourage the development of blockchain technology. In 2022, the country has seen several crypto-related developments, including plans to pilot a central bank digital currency for around 10,000 users.
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