Investment rejig targets digital assets
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Investment rejig targets digital assets

The logos for Bitcoin, left, Ethereum, centre, and Tether at a One Satoshi over-the-counter (OTC) cryptocurrency store in Hong Kong, China, on Feb 26, 2024. (File photo: Bloomberg)
The logos for Bitcoin, left, Ethereum, centre, and Tether at a One Satoshi over-the-counter (OTC) cryptocurrency store in Hong Kong, China, on Feb 26, 2024. (File photo: Bloomberg)

The Securities and Exchange Commission (SEC) has revised the investment criteria for mutual funds and private funds to allow such funds to invest in digital assets, a move hailed by the world's leading cryptocurrency exchange as the country opens up to crypto.

An SEC statement said it revised the criteria for mutual funds and private funds to provide greater opportunities to investors looking overseas at securities and asset management companies.

The new criteria, which took effect on Jan 16, increased flexibility for funds to invest in crypto assets under risk levels appropriate for different types of investors, said the SEC.

Under the new criteria, funds for wealthy investors can invest in crypto exchange-traded funds (ETFs) with any investment proportion, while direct investment in crypto assets has an investment proportion ceiling of 20% of their net asset value (NAV).

Meanwhile, funds for retail investors such as mixed mutual funds, equity mutual funds or alternative asset mutual funds can have total crypto asset exposure through ETFs or foreign mutual funds of up to 5% of the NAV.

In addition, the SEC will improve the relevant criteria to support the establishment and management of funds investing in digital assets, such as asset custody, information disclosure, advertising and improving the investment suitability test to cover investment risk in crypto assets.

For funds investing in digital assets before the new criteria came into effect, they must comply with the new criteria within 90 days from the date the update came into effect.

Nirun Fuwattananukul, chief executive of Gulf Binance, welcomed the move, saying crypto assets are finally entering the mainstream investment landscape.

"The world is quickly evolving. A few years ago, we still talked about Bitcoin being used as a scam or for gambling purposes. Today Bitcoin and crypto assets are being legitimised and recognised as a new financial innovation, suitable for investment purposes," he told the Bangkok Post.

Despite its high volatility and associated risks, global crypto adoption is happening, said Mr Nirun.

In the United States and now Thailand, regulators are opening up to crypto assets.

"Thailand is still early on the adoption curve, which means there are still significant opportunities in this space," he said.

"We likely will see more investors, institutional and retail, start investing in crypto, which has always been our core thesis, and will be a boost for the industry in the long run."

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