Thailand joins Singapore in banning retail lending and staking services as part of the growing global scrutiny on crypto exchanges in Southeast Asia.
The Thai Securities and Exchanges Commission recently banned crypto exchanges from providing lending and staking services to retail customers, following the footsteps of Singapore’s Monetary Authority of Singapore (MAS) which also implemented similar measures.
The moves aim to enhance investor protection in both countries and address concerns surrounding cryptocurrency activities.
Thai SEC Focuses on Investor Protection with New Crypto Exchange Rules:
Similar to Singapore, the Thai regulator’s focus on investor protection is evident. Notably, the ban on lending and staking services applies to retail investors only, allowing crypto exchanges to continue offering such services to institutional customers.
The Thai SEC explicitly stated that the ban covers all depository services providing returns to depositors and lenders. Furthermore, a mandatory trade risks disclaimer was introduced, requiring cryptocurrency exchanges to display clear and comprehensive disclosures of trading risks to customers.
The provided disclaimer emphasizes the high-risk nature of cryptocurrencies, urging individuals to carefully study and comprehend the associated risks. Additionally, crypto exchange operators are required to obtain customers’ acknowledgment of these potential risks before providing their services.
Crypto exchange operators are now required to perform investor suitability assessments to evaluate users’ investment capacity in cryptocurrencies. The Thai regulator previously prohibited the use of crypto as a payment method starting from April 1, 2022, citing concerns over potential risks to the country’s economic stability.
The Thai SEC highlighted the risk of value loss, cyber theft, and data leakage as factors contributing to the ban on crypto payments, while also expressing concerns about the potential use of cryptocurrencies in money laundering activities.
Singapore Prohibits Crypto Staking and Lending Services for Retail Customers:
Thai SEC’s Ban on Crypto Lending and Staking Services Aligns with Singapore’s Regulatory Measures.
Crypto exchanges in Thailand required to establish Trust for customer assets by end of 2023, enhancing fund security and avoiding potential chaos.
Crypto exchanges grapple with consequences following FTX’s collapse:
FTX’s collapse in Q4 2022 resulted in significant losses of customer assets due to a balance sheet deficit and the commingling of funds with sister company Alameda Research.
The fallout from the FTX incident exacerbated the crypto market downturn, leading to widespread asset price declines and bankruptcy filings among crypto-focused companies, triggering increased regulatory scrutiny.
The FTX incident has served as a catalyst for regulators worldwide to implement new measures aimed at safeguarding investors from potential fund losses, prompting enhanced investor protection measures.
Important:Ā Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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