The Securities and Exchange Commission (SEC) plans to transfer oversight of initial coin offerings (ICOs) for investment and utility tokens to the Securities Act in order to remove regulatory overlap and promote digital assets.
Nopnuanparn Pavasant, director of the Fintech Department at the SEC, said the Digital Assets Decree will be amended along with the SEC's Securities Act to ensure that Thailand's regulations regarding digital assets trading are in line with international standards.
The amendments will transfer the supervision of investment tokens and utility tokens that are not readily exchangeable for services and products, previously regulated under the Digital Assets Decree, to the Securities Act.
After the amendments, only two assets -- cryptocurrencies and digital tokens that are not currently under the funding process or ready-to-use utility tokens -- will remain under the Digital Asset Decree.
Ms Nopnuanparn said the licensees involved in ICO fundraising such as ICO portals will also be required to apply for a licence to act as a financial adviser or underwriter in order to lead fundraising projects under the Securities Act.
"At the moment, there are many ICOs waiting to be launched but are still hampered by the confusion over the legal definition of ICOs and whether they should be subject to the Securities Act or the Digital Assets Decree," she said.
"After the regulations are more polished, the legal definition of ICOs will be in line with the international standards," she said.
"The SEC will also ban the trading of privacy coins as it provides no transparency and cannot be examined," she said.
SEC secretary-general Ruenvadee Suwanmongkol said the SEC places great emphasis on regulating digital asset investments and found that in the past 1-2 months young investors are especially interested in cryptocurrencies, which are garnering interest from the new generation of investors.
"Cryptocurrency is a very risky investment with no fundamentals to support it. Young investors may lose all of their money in the investment. Parents should closely supervise their children when investing," Ms Ruenvadee said.
Surasak Ritthongpitak, director of the Market Supervision Department of the SEC, said there were 160,000 cryptocurrency trading accounts in Thailand at the end of 2020.
At the end of January this year, the number increased to 470,000 accounts in which about 20% of the accounts are owned by young investors under 20 years old, with an average investment of 6,500 baht per account.
Pinpraaj Chakkaphak, chief executive officer of ERX, said global regulators have a better understanding of security token offerings (STOs).
They regard the security tokens not as an entirely new asset class but a new product that applies new technology to the original concept of fundraising.
"More investors will turn to investing in security tokens in the future because traders of security tokens will be now more protected by the law," said Mr Pinpraaj.
He said, ideally, the assets that can be used to raise funds through STOs should be backed by stable income and cash flow, and provide rewards to repay investors, such as real estate, gold and accounts receivable.
Poramin Insom, founder and board member of Satang Corporation, said the STOs will increase investment options for retail investors because the exchanges will have to find more attractive products to lure customers.
"The market landscape will change as more small traders enter the security tokens market because they can start investment with a very small amount of fund," said Mr Poramin.