Thai SEC Prohibits Crypto Firms From Providing Staking and Lending Services

Key Takeaways:

  • The Thai Securities and Exchange Commission has placed a restriction on crypto staking or lending services.
  • Previously, the Southeast Asian exchange Zipmex encountered difficulties as a result of its loan to Babel.

The Securities and Exchange Commission’s (SEC) Office encourages submissions on the concept forbidding digital asset operators from providing or supporting digital asset interest-earning locking services like staking or lending.

According to the announcement, the decision to limit “depository services,” which include providing returns to depositors, was taken to shield traders from the hazards connected with crypto lenders.

Furthermore, the official release mentions Prohibiting advertising or soliciting the general public or conducting any other act in the way of supporting the staking & lending services.

The Thai SEC has proposed that it should be made illegal for cryptocurrency business operators to accept deposits of digital assets and then use those deposits to borrow money and make investments in order to repay the depositors.

The list of prohibited actions continues and includes forbidding the conduct of any activity that might promote lending or staking services, including advertising and public solicitation.

Further preventing the operators of digital businesses from accepting digital assets and from giving depositors their money back.

Those who are worried and interested, however, have until October 17, 2022, to express their views. According to the statement,

The Securities and Exchange Commission (SEC) Office invites its thoughts on the concept of preventing digital asset operators from providing or supporting digital asset depository services that pay depositors returns.”

The cryptocurrency exchange Zipmex was experiencing a liquidity crisis a few weeks ago. Its balance sheet suffered as a result of its exposure to the Celsius Network and Babel Finance.

Due to the erratic market conditions, it also suspended trading and stopped making withdrawals. The Thai SEC then discussed the potential losses the public might experience. It also considered input from the affected Zipmex users.

When it comes to cryptocurrency, Thailand has grown increasingly antagonistic. The Thai Securities and Exchange Commission announced a prohibition on the usage of cryptocurrencies for payments back in starting of this year. 

Additionally, the commission had put forth a new regulation that required information from cryptocurrency businesses, such as dealers, exchanges, and brokers, to be disclosed.

Aadrika Sharma
Aadrika Sharma

I enjoy writing and try to learn new things every passing day!

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