July 3, 2023 at 11:16 GMTModified date: July 3, 2023 at 16:21 GMT
July 3, 2023 at 11:16 GMT

Thailand puts a stop on crypto lending services

Singapore has taken a step towards safeguarding customer funds by asking cryptocurrency exchanges to keep client money in a trust.

Thailand puts a stop on crypto lending services
Thailand has taken a step towards increasing consumer protection through its new set of rules for the digital asset space. The country’s Securities and Exchange Commission (SEC) has now put a cap on crypto custodial and lending services.

Aimed at firms offering digital asset services, the rules have barred them from using customers’ funds for lending or investment activities. As a result, these platforms won’t be able to offer any kind of return on crypto deposited by customers. The announcement further stated:

“Digital assets are not allowed to be deposited by giving or proposing to give returns from digital asset deposits or other returns to depositors (such as from the company’s marketing budget), unless it is in the nature of sales promotion according to the rules prescribed by the SEC.”

The regulatory watchdog has forbidden its advertisement too. Persuasion of the general public or any act in the manner of supporting the deposit taking & lending service has also been banned.

The rules are scheduled to take effect on 30 August, 2023. Websites of digital asset services are also required to put a “Disclosure of the Risk Warning of Cryptocurrency Trading”. This warning message should be clearly visible and must lay out the potential risks associated with trading cryptocurrencies, with the following message:

“Cryptocurrencies are high risk. Please study and understand the risks of cryptocurrencies thoroughly. because you may lose the entire investment amount.”

Thailand has always been stringent with the rules for the digital asset space. Back in April, the country had banned the use of cryptocurrencies as a means of payment for goods and services. This was done in order to maintain the stability of the financial system and the broader economy.

However, Thai citizens have been permitted to invest and trade digital assets. Despite facing difficulties from regulators, crypto adoption continues to flourish in the country. As per the Chainalysis data, Thailand reigns in the eight position in terms of global crypto adoption in 2022.