Thailand’s Securities and Exchange Commission (SEC) prohibited domestic cryptocurrency entities from providing staking and lending services to clients. The ban aims to protect traders and the public from risks related to such activities.
The South East Asian country has been active on the digital asset scene lately. At the beginning of the year, the local authorities displayed intentions to start taxing transactions with bitcoin and alternative coins, while later, they outlawed crypto’s usage for payments.
Thailand’s Next Step
According to a press release, Thailand’s SEC banned local cryptocurrency business operators from offering or supporting digital asset depository services such as staking and lending. The watchdog raised hopes that the move will ensure maximum protection for local investors and minimize the general public’s risks when interacting with the sector.
The regulator said enforcing such a ban is essential since many foreign companies have experienced liquidity issues in the past several months. One example is the DeFi platform and one of the largest cryptocurrency lenders – Celsius Network.
In June, it ceased withdrawals, swaps, and transfers between accounts, citing “extreme market conditions.” A month later, the firm filed for Chapter 11 bankruptcy protection with the Southern District of New York.
Another cryptocurrency lending platform part of that list is Babel Finance which paused all withdrawals due to liquidity issues. Shortly after, it was rumored to have delayed its debt repayments after reaching agreements with major clients and counterparts.
Apart from foreign organizations, Thailand has a representative among the distressed crypto entities, too. In July, the digital asset exchange Zipmex suspended clients’ withdrawals on its platform, while a week later, it filed for moratorium relief to prevent its creditors from making claims for the next six months.
The Crypto Environment in Thailand
Last year, the Thai authorities seemed determined to boost the development of the local digital asset industry. In September, the Tourism Authority of Thailand (TAT) wanted to create a utility token called the TAT coin, which could enable the transfer of vouchers and help tour operators gain greater liquidity.
Back then, Mr. Yuthasak – Governor of the agency – said digital assets are “changing the world,” and they could help Thailand get back on its feet after the COVID-19 pandemic crippled the domestic tourism sector.
In 2022, the Asian nation dabbled with what kind of taxation it should apply on cryptocurrency mining, trading, and transacting. After multiple considerations, it scrapped its intentions to implement a 15% withholding tax on digital asset transactions.
Another major amendment occurred at the beginning of April when lawmakers prohibited the employment of cryptocurrencies as a means of payment for goods and services.