You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

August 29, 2024

Thailand Updates Requirements for Digital Asset Business Governance and Exchange Rules

Subscribe to Updates

Thailand’s Securities and Exchange Commission (SEC) has revised its regulations on digital asset operators and exchanges to impose stricter governance standards on digital asset business operators and to align digital asset exchange rules with international standards. The new regulations are laid out in SEC Notification No. GorThor. 23/2567 on the Criteria, Conditions, and Procedures for Operating a Digital Asset Business (No. 24) and SEC Notification No. GorLorThor. 24/2567 on Determination of Prohibited Qualifications for Directors and Executives of Digital Asset Business Operators (No. 5). These were published in the Government Gazette on August 16, 2024, with most of the provisions taking effect on the same date.

Governance for Digital Asset Businesses

The heightened standards for digital asset business operators aim to ensure efficient business supervision and appropriate response to operational risks. The new requirements mainly address:

  • Board of directors composition. Large-sized digital asset business operators (i.e., those with at least 10,000 customers and holding customer assets of at least THB 500 million) who do not provide digital asset custodian services must have at least five directors, at least two of whom must be independent directors. In addition, the business operators must establish an audit committee, with at least two members being independent directors, to create an appropriate “check and balance” mechanism within the organizational structure. Current digital asset business operators must comply with the requirements within 180 days of the notification’s effective date.
  • Qualifications of authorized directors and managers. Authorized directors and managers are now required to (1) either have at least one year of working experience in the digital asset field or have participated in a digital asset course from an SEC-approved list, and (2) participate in a good corporate governance course recognized by the SEC. Current authorized directors and managers who have not previously completed a good corporate governance training course must complete such a course within one year of the notification’s effective date.
  • Management and operational structures. Check-and-balance mechanisms are required for every major operational system. Business operators must establish a customer asset management policy, and all customer assets in the business operator’s custody must be managed according to the security risk and by separate personnel from other operational personnel that may have a conflict of interest. Business operators must also provide a customer service system that is suitable to the risk and complexity levels of the relevant types of digital assets.

Exchange Rules

The SEC has also introduced new minimum requirements for digital asset exchange rules, which must be approved by the SEC. The key updates include:

  • Listing and delisting rules. As indicated by a new utility token supervisory scheme that was issued days earlier, group 1 utility tokens are not allowed to be listed on the exchange. (Group 1 utility tokens are those issued for consumption purposes or as a digital representation of a certificate, such as loyalty points, concert tickets, NFTs, and carbon credits.) In addition, listing rules now require adoption of the “silent period” concept, whereby tokens offered for sale below the market price cannot be listed in the six months after the offering. In terms of issuer disclosure, digital asset exchanges must now require digital token issuers to disclose information as stipulated by the SEC.
  • Trading, clearing, and settlement rules. Digital asset exchanges are now required to have a real-time trade monitoring system to detect abnormal trades, and daily monitoring reports must be submitted to the SEC. If the digital asset exchange finds suspicious action, it must promptly report this to the SEC. The digital asset exchange must also have signposting to inform investors about potential risks from investing in certain tokens.
  • Market makers. Digital asset exchanges with market makers must have rules on qualifications, scope of work, ongoing performance supervision, and noncompliance measures relating to market makers.

For more information on these new notifications, or on any aspect of digital assets and cryptocurrency in Thailand, please contact Kobkit Thienpreecha at [email protected], Pornpan Wichawut at [email protected], Napassorn Lertussavavivat at [email protected], or Rujaporn Paritsantik at [email protected].

Related Professionals

Industries

Fintech

Technology

Location

RELATED INSIGHTS​ 

February 3, 2025
On January 28, 2025, the Office of the Personal Data Protection Committee (PDPC) hosted Data Privacy Day 2025, bringing together over 1,000 participants from both the public and private sectors. The event underscored the importance of personal data protection and aimed to raise nationwide awareness while fostering a culture of compliance. During the event, the PDPC reaffirmed its commitment to strengthening Thailand’s data protection framework to align with international standards. The initiative also emphasized the collective goal of achieving zero data breaches. During the first session of the event, Mr. Prasert Jantararuangtong, deputy prime minister and minister of digital economy and society, delivered a speech highlighting the role of personal data protection in fostering Thailand’s digital economy. He emphasized that strong data protection measures enhance business credibility, build consumer trust, and attract foreign investment. He also addressed the PDPC’s “zero data breach” policy and the ongoing issue of data leaks, which have been exploited by call-center scam operations to deceive the public and cause financial harm. Additionally, Mr. Prasert announced that the Thai cabinet has approved a draft amendment to the Emergency Decree on Cyber Crime Prevention and Suppression B.E. 2566 (2023), commonly referred to as the “Cyber Crime Decree.” The draft will now proceed to the Council of State for review before its official enactment. Key provisions of the amendment include holding financial institutions, telecom providers, and social media platforms accountable for technology-related crimes; requiring compensation for victims; and enforcing stricter security measures. Cyber offenses, including personal data trading, face harsher penalties of up to THB 5 million in fines or five years of imprisonment. Authorities are also empowered to suspend suspicious SIM cards for committing illegal activities and expedite monetary refunds for victims without court approval. In the second session, the Office of the PDPC presented its
Read More
January 30, 2025
The Thai cabinet has approved a draft amendment of the Emergency Decree on Measures for the Prevention and Suppression of Technological Crimes as proposed by the Ministry of Digital Economy and Society to strengthen measures against technological crimes, particularly targeting call center scams and cyber fraud. Following the Council of State’s review, the emergency decree will be become effective immediately upon its enactment and publication in the Government Gazette. While the draft amendment is not yet publicly available, the government recently indicated that the emergency decree aims to empower authorities with decisive measures to combat cybercrime effectively. It underscores the shared responsibility among various sectors, including banking, telecommunications, and online platforms, in safeguarding against technological crimes. Key provisions of the draft amendment of the emergency decree include: Telecommunications provider obligations: Telecommunications service providers must suspend SIM cards associated with criminal activities. The National Broadcasting and Telecommunications Commission and mobile service providers themselves are authorized to temporarily suspend mobile phone numbers if there is reasonable suspicion of involvement in criminal activities. Banking responsibilities: Financial institutions are required to promptly report mule accounts to the Anti-Money Laundering Office to facilitate quick restitution to victims. The Anti-Money Laundering Transaction Committee is empowered to order the return of funds to victims without requiring a final court ruling. Penalties for noncompliance: The amended emergency decree introduces penalties for noncompliance by regulated entities that fail to prevent criminal activities for offenses related to technology crimes in the following cases: Digital asset services: Those engaged in the buying, selling, or exchanging of digital assets, such as cryptocurrencies and digital tokens, as well as digital asset businesses that launder money obtained from online crimes by converting it into digital currency, will be subject to imprisonment for up to one year, a fine of up to THB 100,000,
Read More
January 24, 2025
Following Vietnam’s adoption of the new Law on Data (“Data Law”) on November 30, 2024, there remained uncertainty as to what impact the new framework would have on businesses in Vietnam and abroad. The government has now released a package of four draft legal documents aimed at guiding the implementation of the Data Law: (1) a decree on the National Data Development Fund (“NDDF Decree”), (2) a decree related to regulations on scientific, technological, and innovation activities and data products and services (“Decree on Specific Activities”), (3) a decree detailing a number of articles and measures to implement the Data Law (“Implementation Decree”), and (4) a decision on the lists of important data and core data. This article will provide an overview of the draft legislation. 1. NDDF Decree The draft NDDF Decree relates to the establishment, management and use of a National Data Development Fund (“NDDF”), which is a non-profit and non-budgetary state financial fund established and managed by the Minister of the Ministry of Public Security (MPS). The NDDF has legal personality and is fully state owned, operating similarly to a single-member limited liability company. Its main objectives are to support, promote, and invest in artificial intelligence (AI), the Internet of Things (IoT), and other new technologies and innovation. The NDDF may lend to, invest in, or otherwise support eligible organizations. The draft NDDF Decree also proposes a series of regulations on donations to the NDDF and from the NDDF (through expense support), the lending activities of the NDDF to commercial banks, which will in turn lend to eligible organizations, the investment activities in data products and services innovative start-ups, and other kinds of support. The government commits to provide VND 1 trillion (approx. USD 40 million) to the NDDF, evidencing the importance the government places on
Read More
January 23, 2025
Thailand’s Ministry of Digital Economy and Society, through the Digital Economy Promotion Agency (DEPA), recently held a focus group hearing on the draft Gaming Industry Promotion Act. This legislation seeks to strike a balance by promoting the growth of the online game industry while safeguarding society, with a particular focus on protecting youth from potential negative impacts and enhancing a positive gaming environment. From the public releases, the draft act is expected to address several key aspects, including: Registration requirements for key industry players, such as developers and platform providers. It is also worth monitoring whether these requirements will also apply to offshore entities offering services to users in Thailand. Governance measures, such as game rating systems and measures to address online gambling and violence in games. Incentives, such as the establishment of a fund to support the gaming industry, and tax incentives to promote Thai gaming businesses. DEPA plans to incorporate feedback from the focus group hearing to refine the Draft Act. The legislation is expected to be submitted to the cabinet for approval by April 2025, with enactment expected by the end of 2025. As this draft law is still at an early stage, amendments may be introduced during the legislative process. Businesses and stakeholders in the gaming industry are encouraged to monitor the matter closely and assess how the developing legislation may impact their operations.
Read More