Thailand prohibits NFT trading

Monday 14 June 2021 14:20 CET | News

The Thai Securities and Exchange Commission (SEC) Board has imposed new digital asset market regulations that prohibit digital asset exchanges from trading non-fungible tokens (NFTs).

Meme-like tokens such as Dogecoin and Fan-tokens are also be banned from trading on digital asset exchanges. Thailand’s new rules will cover everything from sports collectibles to NFTs representing rights in a physical luxury item such as a watch or even real estate.

The SEC did not provide any specific reason for the ban. Some potential grounds are the recurring scams relating to digital assets. As these assets became more popular, there have been more opportunities for scammers to successfully sell different NFTs or fan-tokens than the ones advertised. 

Another potential reason is the unrealistic valuation related to these digital assets. While the NFT hype is past its peak, some of these assets, which represent nothing more than a file and an abstract ownership right to something, are still being sold for thousands of dollars. The purchasers are the ones willingly making the decision to invest in the tokens, but the SEC might be trying to protect investors from a potentially extreme devaluation of the assets.

Similarly, the ban might be related to these assets weak link to ownership rights, some of which are issued by people who don’t own the intellectual property related to the digital asset. In the US, DC Comics warned its artists that they don’t own the rights to original cartoon drawings after a Wonder Woman NFT sold for USD 1.85 million.

If the issuer doesn’t own the intellectual property of the issued NFT, the asset is almost meaningless. It is worth noting that the SEC is not banning the issuance of NFTs. It is only banning the trading of these digital assets. The reason is most likely that digital asset exchanges are easier to control.

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Keywords: NFT, digital assets, blockchain, cryptocurrency exchange, regulation
Categories: Blockchain & Cryptocurrencies | Cryptocurrencies
Countries: Thailand
This article is part of category

Blockchain & Cryptocurrencies