ICO and token rules take shape
Virtual coins won't be currency, Apisak says
The new law to regulate cryptocurrencies and initial coin offerings (ICOs) will be enacted and virtual coins will be classified as digital assets, not currency, says Finance Minister Apisak Tantivorawong.
The working panel on supervising digital currencies will consider rules and regulations to govern ICO issuance, he said.
There are three types of ICOs: asset-backed, securities-backed and utility tokens. Utility tokens let investors purchase a company's products or services; asset tokens enable investors to acquire rights in assets such as bullion or properties; and securities tokens allow investors to obtain rights in revenue- or profit-sharing without engaging in day-to-day operations.
Requirements for underlying assets or services and Know Your Customer (KYC) rules are crucial parts of the imminent regulatory framework, aimed at thwarting the use of digital currencies as instruments for cheating people and laundering money.
Rapee Sucharitakul, secretary-general of the Securities and Exchange Commission (SEC), said recently that the regulations must set standards for information disclosure and transaction reporting, while system security, transaction objectives and utilisation of proceeds arising from ICOs would also come under the regulatory framework.
The SEC's board of directors will review the ICO regulatory framework on March 8 after the public hearings on a draft bill regarding ICOs are completed.
Deputy Prime Minister Wissanu Krea-ngam said the new law controlling cryptocurrencies and ICOs will be enacted as a royal decree. He said the draft royal decree is expected to be finished in the next few days, with the formal decree issued soon.
"The government sees it as essential to control ICOs and cryptocurrencies because such innovative investment instruments could trigger money laundering and crime, which eventually causes damage to investors," Mr Wissanu said. "The new law should come with efficiency and strong enforcement, while the Bank of Thailand and the Securities and Exchange Commission should closely monitor the issue."
Deputy Prime Minister Somkid Jatusripitak said Wednesday that the government would try its best to issue the new law to regulate ICOs and cryptocurrencies this month.
Prinn Panitchpakdi, country head of CLSA Securities Thailand, said the SEC has an excellent understanding of ICOs.
The Finance Ministry, the Bank of Thailand and other related agencies have a lesser grasp of the issue, Mr Prinn said.
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