Key takeaways:
- Thailand’s Securities and Exchange Commission (SEC) has published guidance for cryptocurrency custodians operating in the country.
- The Thai SEC’s new regulations went into effect on January 16, 2023.
To safeguard the security of consumers’ assets, the Securities and Exchange Commission (SEC) of Thailand has ordered providers of digital assets to set up a digital wallet management system.
In order to facilitate effective custody of digital assets and keys and protect the security of users’ assets, the new regulations mandate that operators of digital asset businesses that offer custody of clients’ digital assets set up a digital wallet management solution.
Additionally, proper explanations of how private keys are generated, stored, and accessed should be given.
Furthermore, a contingency plan for any circumstance that can have an impact on the administration of digital wallets and keys is necessary. Developing and testing action plans, selecting accountable individuals, and reporting the incident are all included in this.
According to the regulations, VASPs (Virtual Asset Service Providers) are required to consult with authorities about such policies and present action plans to guarantee compliance.
The declaration says that the new regulations are now in effect as of January 16, 2023. Custodians of cryptocurrency are required to fully comply with the guidelines within six months of its implementation.
Since the FTX disaster, regulators all around the world have been working to put in place the right laws to stop such catastrophic occurrences.
Without a doubt, Thailand is strengthening its presence in the cryptocurrency industry. The Bank of Thailand, the nation’s central bank, recently unveiled intentions to let virtual banks operate in Thailand for the first time by 2025.
The application process for virtual banks would start later in 2023, according to the document titled “Consultation Paper on Virtual Bank Licensing Framework.”
The SEC also stated that in order to minimise the impact on the exchange’s customers in the event of a system breach, a comprehensive securities inspection and “digital forensic” investigation are required.
According to the transitional rules, operators of digital asset businesses who had been providing custody of clients’ assets before the legislation was implemented are obliged to completely conform by six months of that date.
