New developments in Thailand’s decentralized finance (DeFi) sector may face new regulations after a new SEC announcement this past weekend.
In a recent report by the Bangkok Post, any DeFi project that involves the issuances of a digital currency will potentially need a license from Thailand’s Securities and Exchange Commission (SEC).
The Thai SEC released the news after an incident which involved a DeFi farming platform and momentary hyperinflation.
Tuktuk Finance, a Thai DeFi protocol, debuted on Thailand’s leading digital asset exchange Bitkub this past weekend. The native token of the platform, TUK, immediately saw a hundred dollar spike and plummet within minutes. This sparked an interest in the token from both investors and regulators. TUK currently trades just below $2.
This is the first instance of the SEC specifically targeting the DeFi sector in Thailand.
“The issuance of digital tokens must be authorised and overseen by the Securities and Exchange Commission and the issuer is required to disclose information and offer the coins through the token portals licensed under the Digital Asset Decree,” the SEC said.
In addition, the CEO of Ava Advisor, a Thai-based investment advisor app, Niran Pravithana, commented that the development is reasonable due to the fraudulent amount of tokens floating around in the space.
The SEC warns that DeFi business proprietors should consider the new regulations before moving forward with investors, while those investing should really understand the risks of interacting with the DeFi space.
Thailand crypto crackdown
While this may be Thailand’s first look into regulations in the DeFi space, it’s not the first time the country has cracked down on the cryptocurrency industry.
Last month, news from the Kingdom broke that new crypto accounts require in-person ID checks and registration. The regulations are a development from Thailand’s Anti-Money Laundering Office (AMLO), in an effort to curb money laundering. International investors are now unable to access Thai exchanges without a Thai identification document.
Thailand joins the ranks of other countries including China, Turkey, and Nigeria to impose harsh regulations or bans on digital currencies.