SEC prepares wallet for digital assets

SEC prepares wallet for digital assets

Measure involves 14 state agencies

The SEC plans to revise several laws to prevent the use of cryptocurrencies in crimes. (Photo: AFP)
The SEC plans to revise several laws to prevent the use of cryptocurrencies in crimes. (Photo: AFP)

In collaboration with 14 state agencies, the Securities and Exchange Commission (SEC) is planning to create a "government digital wallet" to store all digital assets seized or frozen by the state as proceeds of crime in order to make the assets more secure.

The wallet will also improve the SEC's efficiency in enforcing the Digital Asset Decree and provide more protection for the interests of the people.

The SEC and 14 state agencies held a meeting last Friday, chaired by vice minister of justice Samart Jenchajitwanit.

Mr Samart said technologies have been advancing tremendously and cryptocurrencies are increasingly adopted as a medium of exchange for goods and services instead of fiat money.

However, some laws, especially those related to the confiscation or freezing of offenders' assets, may not be able to catch up with rapidly evolving financial technologies which have created new ways to carry out transactions.

There are loopholes in law enforcement which give criminals a chance to use digital assets for illegal activities such as money laundering and drug dealing, said Mr Samart.

To prevent the use of digital assets in such illegal activities, the SEC plans to revise several relevant laws to increase the efficiency of law enforcement.

Ruenvadee Suwanmongkol, secretary-general of the SEC, said in the past law enforcement agencies seized digital assets from offences under the regulations of each agency.

The SEC, as the regulator of digital asset businesses under the decree, thus held a meeting to gather opinions from relevant state agencies and exchange views on the seizure, retention and actions related to the confiscation and management of such digital assets.

The SEC also proposed the creation of a standardised government digital asset wallet for these agencies to store the confiscated digital assets.

Tanwa Arpornthip, a researcher at Block Research, the blockchain research unit of the College of Computing at Prince of Songkla University's Phuket campus, said the government digital wallet is an important tool in managing confiscated digital assets.

Close collaboration between all organisations, including the private sector, is crucial because of the technical nature of the activities.

"It could be a government-wide custodian solution in which many digital wallets are managed," according to Mr Tanwa. "Multiple wallets enable asset separation among different cases."

However, he said government agencies are encouraged to take a proactive role in preparing for incoming changes to the financial world and should improve.

For instance, it should set up a sandbox that allows developers and businesses to test new business models and digital infrastructures, while providing more clarity regarding taxes related to digital assets.

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