SEC issues warning on Binance's legality
The Securities and Exchange Commission (SEC) is warning investors that Binance, an international cryptocurrency exchange based in Malta that accepts Thai baht deposits, is illegal in Thailand and has called on the company to open a dialogue with the regulator.
"We [SEC] would like to inform that Binance is not yet a licensed digital asset operator under the Digital Asset Business Decree BE 2561 . People and investors must use caution if persuaded to exchange digital assets, accept deposits, transfer, withdraw funds or conduct digital asset transactions," the commission said.
Assistant SEC secretary-general Archinee Pattamasukhon said the regulator had sent a letter to Binance and relevant parties to clarify certain information about the company.
Poramin Insom, the founder of Thai-based licensed digital asset exchange SatangPro, said that from a rival's point of view, the SEC's action was better than nothing, because it had the responsibility to ensure all platforms complied with existing regulatory frameworks and protected the interests of local exchange platforms, which it had granted licences to.
He said he was unsure how Binance would respond to the SEC's letter.
Binance is well-known among Thai cryptocurrency traders, many of whom have active trading accounts on the exchange, but there may not be enough of them to persuade the platform to apply for a licence in Thailand -- unlike in the US, where Binance's operations are regulated by the US's SEC.
"US citizens account for around 30% of Binance's total customers. Their business in Thailand may not be significant enough for the exchange to participate," said Mr Poramin.
"If Binance came to Thailand, crypto traders in Thailand would have more choices. It would set a new standard of customer service and existing local digital asset exchanges would need to adapt to compete."
He said advanced technology was not the only key for a digital asset exchanges' success, but also the quality of its human resources.
He cited Huobi -- a digital asset exchange which was ordered by the SEC to temporarily close its platform last week -- as an example of a global player whose human resources had failed to meet the SEC's requirements.
Mr Poramin said digital asset exchanges had had to shoulder many additional burdens in order to meet the regulator's requirements, such as carrying out a suitability test -- which he noted Binance had never conducted -- and making sure that know-your-customer (KYC) standards met the requirement set by the Anti-Money Laundering Office. Investors can check the list of licensed exchanges at www.sec.or.th.