Thailand’s SEC to Regulate Non-Fungible Tokens Exchanges

Thailand’s Securities and Exchange Commission (SEC) has announced it is preparing to license operators of non-fungible token exchanges (NFTs) as part of its efforts to secure control of the NFT market.

As a result of tighter regulation, many market participants are expected to migrate to foreign platforms to avoid legal complications.

Even though NFTs are not defined in the Digital Asset Business Act, they may be subject to the SEC’s supervision under the law as they represent a holder’s ownership or rights to items such as art, music, pictures, or collectables. This may mean that NFTs have similar functions to investment tokens or utility tokens, which are subject to the SEC’s supervision.

NFTs are expected to be evaluated on a case-by-case basis to determine whether they can be classified as “digital assets” as defined in the act. For the exchange to offer trading services for a token that will be used for fundraising purposes, it will need to apply for a licence.

NFTs Market Place

Several companies are preparing to launch their own NFT marketplaces in Thailand, according to Sanjay Popli, co-founder of Cryptomind and owner of Merkle Capital.

They may, however, abandon the plan if this rule is implemented and seek platforms abroad. ICO regulations could have the same impact as those enacted by the SEC in 2018, which led many companies to launch projects overseas, he said.

Zimex Thailand co-founder and CEO Akalarp Yimwilai says his company has applied for a licence to launch its own NFT platform in the first quarter.

The regulation may slow the growth of NFTs in Thailand, but if it is supervised by the regulator, then it will give investors more confidence in the sector.

NFT1 is the largest domestic NFT marketplace, while Bitkub, Coral, and JNFT are the other three. In terms of international marketplaces, one of the more notable names is OpenSea, followed by Axie Marketplace, Larva Labs/CryptoPunks, NBA Top Shot Marketplace, and Rarible.