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Thailand’s Securities and Exchange Commission Bans NFT Trading

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Thailand's Securities and Exchange Commission Bans NFT Trading

The Board of Directors of the Securities and Exchange Commission of Thailand (SEC) has enacted new digital asset market regulations that prohibit the trading of cryptocurrencies using non-fungible tokens (NFTs). Meme coins like Dogecoin and Shiba are also banned from trading on digital asset exchanges.

The new Thailand rules cover everything from sports goods to NFTs. This represents the rights to physical luxury items such as watches and real estate. According to the

Bangkok Post, the ordinance came into effect when a J-Mart Group company launched its first NFT aimed at promoting an ecosystem centred on its digital coin, JFin. They did not reveal the specific reason for banning NFT trading.

Some of the possible reasons are recurring digital asset-related scams. As these assets have grown in popularity, scammers have more ways to sell their various NFTs and fan tokens better than they are advertised. SEC Secretary-General Ruenvadee Suwanmongkol further stated that the ban extends to digital currencies with one or more of these characteristics.

  • Symbolized by an influencers fame
  • Unique and cannot be redeemed for the same amount of digital tokens of the same category and type.
  • A digital token is used in blockchain transactions and issued by digital asset exchanges or stakeholders.

Another possible reason why SEC has banned NFTs is the unrealistic valuation of these digital assets. While NFT hype has peaked, some of these assets, which are nothing more than abstract ownership of files and something, are still selling for thousands of dollars.

While buyers are willing to decide to invest in tokens, the SEC may be trying to protect investors from potentially extreme asset devaluations. Similarly, bans may be related to weak links between these assets and property rights, some of which are issued by individuals who do not own the intellectual property associated with digital assets. In the United States, DC Comics warned artists that they do not own the rights to the original cartoon paintings after Wonder Woman NFT sold for $ 1.85 million.

NFT needs to prove its source

If the issuer does not own the intellectual property of the NFT being issued, that property is virtually meaningless. Again, people are willing to invest in this abstract asset, but regulators can prevent them from investing in what they think is of no intrinsic value. However, SEC does not ban the issuance of NFTs. They have just banned the trading of these digital assets.

The reason for this is most likely because the exchange of digital assets is easy to control. Despite the good reason for the ban, it causes some problems. These digital assets, especially NFTs, are a digital form of collectables, and much of their value comes from being able to trade.

There are many digital collections that are traded elsewhere, such as eBay, which is not an NFT. Without a doubt, if there is a way to verify the issuer, the NFT needs to prove its source and is not a counterfeit product, so it could be a good representation of the collection.

In addition, NFTs go beyond digital art and collectables. They will be a new product line that companies can sell. Luxury companies are specifically looking at other uses for this technology. Gucci and other fashion brands are looking for NFT-based 3D clothing to expand their audience in-game. The blockchain alliance Arianne has also created a luxury digital passport that is an NFT, including Richemont’s watch brand Vacheron Constantin.

Although not specifically stated, this regulation also applies to stablecoins issued by digital handbags, as it includes a ban on coins issued by digital handbags.

Related news:

Exploring NFT and How Enterprise Blockchain Could Be Capitalizing

In the World of Cryptocurrency and Blockchain are NFTs Worth it?

 

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