Thai SEC Sets July 16 as Start Date for New Cryptocurrency & ICO Laws

The grand palace in Thailand. Thailand's comprehensive cryptocurrency and ICO laws are due to kick into effect from July 16, 2018.
The grand palace in Thailand. Thailand’s comprehensive cryptocurrency and ICO laws are due to kick into effect from July 16, 2018.

Bangkok, THAILAND – Thailand’s long awaited and comprehensive cryptocurThai rency and initial coin offering (ICO) laws will come into effect on July 16, according to an announcement on the Thai Securities and Exchange Commission (TSEC) website yesterday. The new regulations ironed out details of how ICOs will be regulated and approved in the coming days with a two-tier vetting format and accredited “ICO portals,” determining which ICO applications shall be passed on to the TSEC for further approval. In a private-public sector initiative, ICO portals which have been approved by the TSEC will take first swipe at whether the company proposing to do an ICO should advance to the TSEC for further consideration. According to the announcement,

“Once approved by an ICO portal, the TSEC will begin to consider applications for the issuance and sale of digital tokens for ICOs.”

The hybrid, private-public vetting process is the result of a several months-long consultation and preparation process by the TSEC and the Thai government. The Thai regulations will also represent the first formal regulations to govern ICOs in Asia and the rest of the world, while also managing to sidestep the otherwise tricky debate on the classification of ICO tokens, whether utility or security, by allowing for two different regimes to co-exist.

Central Mall in downtown Bangkok, Thailand. The glittering lights of the city just got brighter for Thai crypto-advocates.
Central Mall in downtown Bangkok, Thailand. The glittering lights of the city just got brighter for Thai crypto-advocates.

The Thai regulations also provide for substantial protection for cryptocurrency investors and traders as well as significant capital provision requirements on the part of cryptocurrency exchanges, dealers and brokers. But the withholding taxes of 15 percent, which can be offset at the end of the tax season as well as the VAT of 7 percent on cryptocurrency transactions, may take some steam out of the Thai initiative to become a hub for cryptocurrency trading and crypto-related activities. Already the rush to be approved and regulated by the TSEC has begun, with no less than 5 prospective ICOs already throwing their hats into the ring to obtain approval under the new regulatory framework. That the interest in being regulated shows no sign of waning in Thailand suggests a positive outlook for the sector and that Thailand may have managed to find its own balance between protecting investors and fostering business activity and fintech innovation in its nascent crypto market.