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Thailand Taking Steps to Regulate ICOs



BANGKOK – As part of its balanced approach, Thailand Securities and Exchange Commission (SEC) is taking further steps to regulate initial coin offerings by expanding current guidelines.

Discussions on the framework between relevant institutions have already started, with a public hearing to be conducted soon. The first ICO to be carried out by a locally registered company is scheduled for March. The plan is to raise more than $20 million for a decentralized lending platform.

Growth in Other Countries Convinced Thailand to Act

Thailand’s Securities and Exchange Commission (SEC) and the Stock Exchange of Thailand (SET) are discussing a comprehensive regulatory framework that will cover fundraising through initial coin offerings, the Bangkok Post reported.

A public hearing is expected to be carried out in the near future. Once completed, the new set of rules will be presented to the Commission’s Board of Directors for further consideration.

Current guidelines limit the maximum investment for retail investors to $10,000 per ICO and $95,000 per person. Using additional information gathered from participants in the market, the SEC’s Board of Directors will finalize the regulatory framework for token sales and related financial transactions. The matter is expected to be raised with the board in the first quarter of this year.

So said SEC Secretary-General Rapee Sucharitakul, noting that the rapid growth of ICO fundraising in many countries is the main reason behind Thailand’s decision to address the matter at policy level. Token sales will be discussed when SEC’s Board of Directors reconvenes.

If ICOs are not regulated, investors and other participants may question their legitimacy, Rapee warned in further comments on the need of regulatory support for this type of investment. The Thai official highlighted the increasing popularity of initial coin offerings with investors and startups from the tech sector. In his words, ICOs are trendy because they can raise funds swiftly without requiring a financial statement.

One such firm is planning to conduct an ICO in March. Jaymart subsidiary J Ventures is set to become the first SET-listed company to sell its own digital currency, releasing “JFin” through a token sale. The raised funds will be used to develop a decentralized digital lending platform integrated with blockchain technology. J Ventures hopes to collect more than $21 million USD in local currency in the first phase of the offering. Tokens will be priced at 6.40 baht each ($0.20 USD) and a total of 100 million coins will be offered through the ICO.

Initial Worries Set Aside

The SEC announcement represents a slight change in the generally positive attitude of the regulator towards initial coin offerings. Earlier comments by its representatives suggested some reservations but it seems that initial worries have been set aside. Assistant Secretary-General Praoporn Senanarong had previously stated that the new fundraising method posed “long-term disruptive risk to traditional financiers”.

At the time of his statement ICO regulation was promised by the second quarter of next year. Praoporn also shared concerns that token sales could replace initial public offerings in the long run. In his words, that would disrupt the traditional operations of asset management firms, investment banking, investment advisories, exchanges and brokers.

Seeking to adopt a “balanced policy with regard to ICOs”, last year the SEC expressed a desire to “strike the balance between supporting digital innovation and protecting investors from potential ICO scams”. The regulator warned that ICOs might be used as a tool for fraud, but also noted the potential of coin offerings to meet the funding needs of startups. Earlier this month Thailand’s regulators allowed bitcoin futures trading.

Under the new ICO regulations companies will be allowed to raise from retail investors up to 20 million baht (≈$640,000) per ICO project. The total fundraising amount is capped at 40 million baht (≈$1.3 million).

The Securities and Exchange Commission also intends to implement screening procedures for the ICO projects through a dedicated portal. Companies will be required to disclose the white paper detailing the project’s objectives, their business plans and models, intended use of proceeds, associated legal risks, management and advisory information, and details about the tokens.


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