The Securities and Exchange Commission (SEC) could impose a cap on funds raised from initial coin offerings (ICOs) of 500 million baht per project in an attempt to curb systemic risks, says an academic.
The market regulator is likely to limit the fund-raising amount derived from ICOs under a notion similar to that of crowdfunding, said Arnat Leemakdej, a professor at Thammasat Business School.
Funds raised from ICOs are expected to have a greater scope than that of crowdfunding, but such an amount may be lower than 500 million baht, Mr Arnat said.
Initially, the amount of funds raised from ICOs was capped at 40 million baht per project, said a source from the financial industry.
"40 million baht will not generate enough liquidity for companies issuing digital tokens to be included on coinmarketcap.com, prompting them to flee overseas as a result," the source said. "Since the SEC has initiated crowdfunding, no startups have come forward to raise funds from this platform because of the limited fund-raising amount."
Crowdfunding size for retail investors is capped at 20 million baht for the first 12 months, and the fund-raising amount is stipulated to be below 40 million baht, according to the SEC. For non-retail investors, there is no limit on fund-raising size.
The SEC yesterday held a meeting of the board of directors on the ICO regulatory framework, but changes from a public hearing on the framework have not been disclosed, said Pattera Dilokrungthirapop, chairwoman of the Association of Thai Securities Companies.
Earlier, the SEC's board of directors held a meeting to consider the ICO regulatory framework on March 8, but no resolution was made.
Deputy Prime Minister Somkid Jatusripitak said the law on supervising digital assets will come into force this month, adding that completely limiting digital asset transactions is not viable.
The law is aimed at keeping the digital asset business operating within legal bounds, he said.
ICO transactions are similar to crowdfunding, whereby the issuer presents a business model to investors, but the key differences are that the raised funds are in the form of digital currencies using blockchain technology and the deals are enforced using smart contracts.
Public hearings on the ICO regulatory framework, drafted by the SEC, completed their last round on Jan 22 after being extended twice.
Most of the market participants have agreed with the SEC on regulating ICOs through an "investment participation" track.
The track requires ICOs to be done through an ICO portal, which must originate in Thailand with minimum registered capital of up to 5 million baht.
Market participants have had varying opinions on the limitations imposed on retail investors and ICOs.