Custodian wallet service regulations set


    The Securities and Exchange Commission (SEC) announced yesterday digital asset custodian wallet services will soon be regulated under the Digital Asset Business law, in an effort to prevent the use of digital assets in illicit activities such as money laundering.

    The SEC alerted the public of the change at a public hearing held on its website, scheduled to end on Feb 26, with enforcement to begin soon after. The hearing allows anyone to submit feedback to the SEC online.

    Other segments of Thailand’s digital asset network are already regulated under the law, such as digital exchanges, brokers, dealers, initial coin offering (ICO) portals, ICO issuers and auditors.

    According to the public hearing document, the digital asset custodial wallet provider must register as a juristic company with minimum paid-up capital of 50 million baht. The digital asset custodial wallet provider must maintain a minimum owner’s equity capital fund of 20 million baht and maintain a net capital requirement specified in the law.

    Wallet providers must be independent of digital asset operators in terms of shareholding structure, directors and management.

    The SEC will not allow the digital asset provider to provide trading services for privacy coins in which actors remain incognito.

    The SEC implemented rules for digital asset operators at the beginning of the year to limit operators from holding more than 15 million baht in combined outstanding worth of clients’ digital assets. If the digital assets of a customer exceeds 15 million baht, they are required to deposit the assets with a digital asset custodian that operates overseas and is not subject to Thai regulations.

    Some types of digital assets do not need to declare transactions publicly. These private cryptocurrencies can conceal transaction information and could be used to launder money or purchase drugs. Digital assets can be used as a means of evading, inspecting and seizing law enforcement assets.

    Some traders have suffered losses from the shutdowns of local digital asset exchanges (Coin Asset and BX) as the operators did not have the private key to unlock the assets.



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