ICO obstacles to fundraising may be lifted

ICO obstacles to fundraising may be lifted

Pre-sale and private sale rules rehashed

The JFin Coin pre-sale was conducted online earlier this year. Some ICOs have taken to raising funds overseas as regulatory development lags. ORANAN PAWEEWUN
The JFin Coin pre-sale was conducted online earlier this year. Some ICOs have taken to raising funds overseas as regulatory development lags. ORANAN PAWEEWUN

The Securities and Exchange Commission (SEC) is conducting a public hearing to relax regulations on pre-sales and private sales of initial coin offerings (ICOs), aiming to reduce impediments for ICO issuers raising funds.

As stipulated by the digital asset royal decree, issuance and sales of digital tokens must receive the SEC's approval and must be made available through a digital token service provider.

The mandate is applied to every case, even if digital token sales are offered via private placement such as pre-ICO sales and private sales.

The existing regulations are barriers for ICO fundraising in practice, so the SEC plans to relax certain rules for digital token sales made through private placement to specific investor groups.

The intention is to allow private digital token sales to proceed without the need to submit registration statements and a draft prospectus.

The move will also reduce burdens for digital token service providers, said the SEC.

Since pre-ICO sales and private sales come with high risks and uncertainties, along with limited information disclosure, the securities watchdog plans to relax the criteria for digital token sales for a limited number of investors and stipulated fundraising amounts.

For founders or those related to founders of digital token businesses, digital token sales will be limited to 50 investors over a period of 12 months.

For individuals, the total amount of digital token sales will be capped at 20 million baht over 12 months.

There is no limit to the number of investors or fundraising amount for institutional investors, private equity firms, venture capital and ultra-high net worth investors.

To prevent exploiting investment opportunities during public ICOs, the SEC plans to require all ICO issuers to distribute all digital tokens to every investor group at the same time after public ICOs end.

Digital tokens receiving a discount or bonus will have a lock-up period of six months starting from the first day of digital token distribution.

"The proposed guideline is an attempt to find greater equilibrium in the regulatory process and reduce regulatory impediments, while taking risk management and investor protection into account," said Tipsuda Thavaramara, the SEC's deputy secretary-general.

"The proposed criteria may not be fully completed, but it is a starting point for businesses to proceed accordingly," said Mrs Tipsuda.

Earlier, Karndee Leopairote, chief executive of Icora Consultant, said the process of launching ICOs in Thailand's digital asset market was lethargic, with no ICO portals receiving an authorised operating licence so far.

These tepid developments have prompted some ICO projects to raise funds in overseas markets instead, Ms Karndee said.

Thailand is one of the first countries to establish regulations to supervise digital asset investment.

The royal decree on digital assets has been effective since May 14.

The SEC is tasked with regulating ICOs and other digital asset businesses, including digital exchanges, brokers and dealers involved with digital asset transactions.

The Finance Ministry has the authority to issue operating licences for businesses seeking to operate digital asset businesses.

SEC secretary-general Rapee Sucharitakul said a certified ICO portal was likely to emerge last month, with the first authorised ICO possibly occurring this month.

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