Industry urges rethink on token ban
Group argues rule gives edge to Bitkub
The Thailand Digital Asset Operators Trade Association (TDO) is seeking a revision following the Securities and Exchange Commission's (SEC) recent ban on trading of meme-based tokens such as Dogecoin, fan-based tokens, non-fungible tokens (NFTs) and exchange-issued tokens.
The TDO condemned the regulator's decision, saying the new rules give a competitive advantage to Bitkub's KUB coin because those coins have already been issued, compared with other exchanges that have yet to do so.
Bitkub is predicted by several global venture capital funds to reach unicorn status (a valuation of US$1 billion) in the next few years because of its leading market position in Thailand.
However, an industry veteran who requested anonymity doubted the firm could achieve such a lofty valuation if the SEC continues to implement heavy-handed regulations regarding digital asset exchanges.
TDO president Peeradej Tanruangporn said the association plans to call a meeting of members to discuss the impact of the rules prohibiting digital asset exchanges from listing their own coins.
The SEC announcement made the price of ZMT token (a native token from the Zipmex exchange) and KUB token (a token from Bitkub Smart Chain) fall sharply on Friday night. The prices rebounded after each exchange announced their tokens were not affected by the new rule.
Bitazza, the issuer of BTZ coin, also said its coin was not affected by the ruling.
Atthakrit Chimplapibul, chief executive of Bitkub Online Co, said the SEC's announcement has influenced $FAN token, a utility token in which local YouTube influencers issue coins to their fan clubs in partnership with Bitkub Capital Group Holdings.
"The project is moving ahead, however we must adjust some details," Mr Atthakrit said. Many of the tokens have already been issued as well as NFTs on its marketplace.
Tanwa Arpornthip, a researcher at the College of Computing, Prince of Songkla University, Phuket Campus, said the rule distorts competitive business practices as traders will turn to the services of foreign operators, resulting in the country losing tax revenue.
Sanjay Popli, co-founder of Cryptomind, said from an industry perspective, the move creates an unfair advantage for exchanges that have already listed banned digital coins.
He said current operators might view the regulatory risk as prohibitive. These risks may attract potential new players to the Thai market, or drive Thai platforms overseas to avoid tough regulations that could derail their business, said Mr Popli.
The SEC has banned a list of coins, so the new rule prohibits exchanges that have not yet listed those coins. However, it doesn't affect exchanges that already listed them.
"This should be considered an unfair oversight," said Mr Peeradej.
"Up and coming exchanges are losing out on opportunities and we would like to ask the SEC more about the new rules. We understand the conflict of interest and the need to protect investors, but regulators need to be fair and supportive of competition in the industry. This is just my personal opinion."
The SEC issued the rules last Friday after publishing in the Royal Gazette a ban on certain types of cryptocurrencies, effective June 11.
The prohibited tokens defined by the SEC are meme tokens, which have no clear objective or underlying substantive value; fan tokens, tokenised by celebrities and influencers; NFTs, a way to buy and sell ownership of digital art; and tokens issued by the owners of digital asset exchanges as a way to raise funds for a startup.
Exchanges are required to comply and revise their listing rules within 30 days from the effective date.
SUBJECT TO MANIPULATION
Charuphan Intararoong, the SEC's assistant secretary-general for intermediaries and markets, said meme coins such as Dogecoin are fundamentally unsupported.
"The price moves because of influencers, while fan tokens and NFTs may have insider trading issues where investors don't have access to adequate information," she said. "The SEC does not prohibit trading them elsewhere, such as through dealers or brokers."
Market surveillance systems are planned to protect against coin manipulations for exchanges that already issued coins prohibited by the new rules.
Thawatchai Pittayasophon, assistant secretary-general for legal affairs at the SEC, said exchanges that have issued coins and lists will not be affected by the rules retroactively, but the law bans exchanges from issuing such coins moving forward.
The SEC acknowledges the impact this ruling has on the industry, primarily regarding investor protection, however digital asset exchanges can still issue these coins and trade them elsewhere, just not on their own exchanges.