The Securities and Exchange Commission (SEC) in Thailand has warned digital asset exchanges that their advertisements and the organisation of introducing broker agent (IBA) events might violate local regulations, Bangkok Post reported today (Monday). The regulator clarified that IBAs can only promote digital token services to avoid speculation on cryptocurrencies, which are categorised as high-risk assets.
IBAs are local companies or agents that onboard clients in a local market for their partner digital asset exchanges for commission. These practices are standard for exchanges or brokers that do not operate directly in some markets.
The warning came as the Thai regulator is reiterating the operations of digital asset exchanges in the country to ensure their compliance with local business standards and to focus on benefiting investors and protecting their interests.
Cryptocurrency exchanges are legal in Thailand, but they must obtain local approval. Last month, the country even allowed asset management firms to launch private funds to offer bitcoin exchange-traded funds (ETFs), but only to institutional and ultra-high-net-worth investors.
However, the country banned the sale of cryptocurrency lending products and also mandated that exchanges display a risk warning message.
Companies Must Be Honest
The recent cautionary order confirms the Thai regulator’s priority to ensure the advertisements and sales promotions of the crypto exchanges comply with specified criteria and also eliminate false, exaggerated, distorted, concealing, or misleading information. It further highlighted the mandatory warnings about investment risks for investors in all advertisements and promotions.
“When operators organise sales promotions by offering rewards to entice people to use the service, this could encourage use of the service without considering the investment risks. This is especially the case for cryptocurrencies,” Anek Yooyuen, Deputy Secretary-General of the Thai SEC said in a statement.
“The SEC is asking business operators to strictly comply with the rules and be careful when organising IBAs, advertising and sales promotions, following the relevant rules and guidelines. If there is any violation, there will be punishment according to the law.”
