The Thai Securities and Exchange Commission has banned digital asset exchanges from trading meme- or fan-based tokens, non-fungible tokens and exchange-issued tokens.
The regulation is expected to affect so-called meme tokens like Dogecoin, which originated as a joke cryptocurrency and has become an object of speculative frenzy, as well as tokenised arts and collectibles. It was enacted on Friday with immediate effect, although it’s not retroactive, according to a statement from the regulator.
The move came amid reports that SET-listed Jay Mart was making plans to launch the country’s first non-fungible tokens (NFTs) linked to nine local stars and celebrities.
The move reportedly was meant to promote the ecosystem of Jay Mart’s digital token JFin coins, increasing demand for a variety of digital tokens in the market.
NFTs, which certify a digital asset to be unique and not interchangeable, are tracked on blockchains to provide the owner with a proof of ownership. They have become a popular way to sell digital artworks, in some cases for millions of dollars.
Ruenvadee Suwanmongkol, the SEC secretary-general, said exchanges are banned from trading utility tokens or cryptocurrencies that have one or any of the following characteristics:
- Having no clear objectives or substance, and whose prices are dictated by social media trends, or meme-based tokens;
- Tokenised by the fame of influencers, or fan-based tokens;
- A digital creation to declare ownership or grant rights in an object or specific right; it is unique and not interchangeable with digital tokens of the same category and type at the equal amount, or non-fungible tokens;
- Digital tokens that are utilised in a blockchain transaction and issued by digital asset exchanges or related persons.
The exchanges are required to comply and revise their rules within 30 days, the regulator said. Failure to do so could result in the delisting of the digital token, it said.