ICOs get 30 extra days to inform SEC

ICOs get 30 extra days to inform SEC

Apisak: Prior deadline unreasonable
Apisak: Prior deadline unreasonable

A draft version of a royal decree regulating transactions related to digital assets will grant issuers of initial coin offerings (ICOs) 90 days to inform the Securities and Exchange Commission (SEC) of their plans before the law takes effect.

The decree, which was approved by the cabinet on Tuesday, extends the period from 60 days initially.

The amendment was made after market participants complained 60 days was not a reasonable amount of time, said Finance Minister Apisak Tantivorawong.

The bill narrows the definition of digital assets to cryptocurrencies and digital tokens, removing other potential asset classes such as electronic data, as specified by the ministry in a previous draft.

Investors who make digital-asset trades will be liable for a 7% value-added tax (VAT) payment, on top of a 15% withholding tax on capital gains when the new law is enforced.

The VAT will still apply even if digital trades produce no gains.

Once approved, the law will be published in the Royal Gazette.

Deputy Prime Minister Somkid Jatusripitak said earlier he expected to see the law come into force this month.

Regulators have raised concern at the faddish nature of ICOs as a form of fundraising that leaves much room for abuse by unscrupulous actors at the expense of often-naive investors who are new to the market.

They are especially vulnerable as there is no law governing these digital currencies that can be used to protect investors. Critics also stress how digital assets lend themselves to money laundering.

Mr Apisak said the law is designed to protect retail investors.

The version being processed will provide a wide regulatory framework to allow the SEC to issue organic laws or regulations to supervise players, he said.

Both buyers and sellers of digital assets are required to declare how they use the funds raised from an ICO to the Anti-Money Laundering Office, he added.

Some pundits have urged the government to welcome ICOs as an aid to startups taking off.

But Mr Apisak said any venture with a sound business plan would find funding and did not need to depend on this latest twist of the crowdsourcing model.

Regulators fear a repeat of previous market crashes when investors, largely guided by emotion, jump into the stock market without researching the fundamentals of the projects they are engaging in, officials say.

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