The Finance Ministry, the Bank of Thailand, the Securities and Exchange Commission (SEC) and the Anti-Money Laundering Office are scheduled to meet on Tuesday to create a clearer regulatory framework to supervise initial coin offerings (ICOs) and cryptocurrencies.
Requirements for underlying assets or service and Know Your Customer rules are crucial parts of the imminent regulatory framework, aimed at thwarting the use of digital currencies as instruments to cheat people and launder money, an informed source at the Finance Ministry said.
The SEC, which has been delegated the task of forming a regulatory framework for ICOs and cryptocurrencies, will inform the development, the source said, adding that the new law is expected to be promulgated and the current laws may be used to govern virtual tokens.
Rapee Sucharitakul, secretary-general of the SEC, recently said that the regulations must set standards for information disclosure and transaction reporting, while system security, transaction objectives and utilisation of proceeds arising from ICOs will also come under the regulatory framework.
The SEC's board of directors will review the ICO regulatory framework on March 8 after the public hearings on a draft bill regarding ICOs are completed.
SEC deputy secretary-general Tipsuda Thavaramara said last Friday that the Finance Ministry looks set to allow the SEC to supervise all types of fund-raising through ICO and digital assets.
If this bears fruit, the SEC's authority will cover the supervision of digital assets apart from securities digital tokens, over which the market regulator already has supervision authority based on the SEC Act.
Regulators are worried about the rising popularity of fund-raising through ICOs and cryptocurrency trade, as no law governing these digital currencies can be used to protect investors.
MAI-listed Project Planning Service Plc emerged as the most recent firm expecting to unveil a securities ICO this month, while J Ventures, a subsidiary of SET-listed Jay Mart Plc, recently sold 100 million digital tokens to the general public to raise 660 million baht.
The source said that the Finance Ministry stands ready to support investment in digital currencies, and the use of tokens to deceive investors and launder money is still a matter of concern that the regulatory guidelines must cover.
"Without the regulatory framework, it will be a money-laundering heaven," the source said. "Therefore, it is necessary to know the identity [of issuers]."