As a part of new regulations, ICO issuers will have to undergo a thorough screening by the SEC before being launched and open to retail investors.
Thailand’s regulatory watchdog and capital market authority – Securities and Exchange Commission (SEC) – made an announcement on Wednesday, July 4, unveiling the regulatory framework for the functioning of Initial coin Offerings (ICOs) while has been scheduled to go in practical application since July 16, ahead this month.
Under the new guidelines, for any new business or startup willing to conduct an ICO, it first needs to get itself registered and approved by the Thailand SEC with a minimum required capital of 5 million bahts (approx. $150,000). The new regulation includes a two-tier vetting procedure with accredited “ICO portals” which will be looking into selecting the applicants to proceed further for the final ICO screening.
The announcement reads: “Once approved by an ICO portal, the SEC will begin to consider applications for the issuance and sale of digital tokens for ICOs.” This system is the outcome of the close consultation of the regulatory body with the government done over a period of several months.
The SEC has also confirmed that each of the approved ICO operators can issue unlimited digital tokens to venture capital and private equity firms, institutional investors and ultra-high-net-worth individuals. However, there will be a token value cap of 3000 baht for retail investors.
The SEC has also mandated the disclosure of financial statements, investment prospectus, and the source code. The regulatory agency will also scrutinize and look into these ICO portals’ management structure and plan of operations. The report adds that ” they must be prepared to evaluate ICO issuers’ business plans and the distribution structure of digital tokens as well as perform checks to ensure that computer code, or source code, matches the disclosed information.”
One caveat to the newly approved regulatory procedure is that ICO issuers can receive payments only in the seven approved digital currencies which include: Bitcoin, Ethereum, Ripple, Bitcoin Cash, Ethereum Classic, Stellar and Litecoin. Else only Thai baht will be approved in the form of fiat investments.
Rapee Sucharitakul, secretary-general at the SEC said:
“The SEC is pleased to immediately discuss details with those who would like to be approved as ICO portals in order for them to be prepared for the regulatory framework. After the SEC approves an ICO portal, the token will be assessed for approval.”
The Thai authorities started the legislative procedure to regulate the crypto market back in March. These new guidelines are a push towards Thai government’s approval of conducting ICO ina fully-regulated environment. Recently, the Thai government has also taken some important measure to relax the tax norms on crypto gains for its investors. In May, the government announced to waive off 7% value-added-tax (VAT) while giving some relief to the local cryptocurrency investors.