The Thailand Securities and Exchange Commission (SEC) has banned crypto operators from providing or supporting deposit-taking and lending services.
According to a press release by the SEC, the resolution against offering staking and lending services was approved “to protect traders and the general public from the risks of such transaction providers.”
Referred to Struggling Crypto Lenders
The SEC has pointed out that, at present, there are many foreign service providers who are facing liquidity problems. The association has stated that the struggling foreign depository service providers have to stop providing services and suspend withdrawals of digital assets of customers.
Celsius, a cryptocurrency lending company, had a major fallout after CEO Alex Mashinsky was accused of taking control of trading strategy and placing trade orders based on false information. The company filed for Chapter 11 bankruptcy in July 2022 after closing debts owed to Compound, Aave, and Maker.
Babel Finance, another crypto lender, lost $280 million while trading customer funds. The company had to suspend withdrawals amidst liquidity pressure. Furthermore, Zipmex -one of Asia Pacific’s prominent digital assets exchange platforms operating in Singapore, Thailand, Indonesia, and Australia- froze withdrawals while facing financial difficulties caused by troubled crypto lender Babel Finance, as Zipmex was facing losses of around $100 million of funds to Babel Finance.
Following the crypto fallouts of companies like Celsius, Babel and Zipmex, SEC has decided to prohibit digital asset business operators, also prohibiting advertising or soliciting the same to the general public.
The SEC recently imposed stringent rules around crypto ads and said that ads must clearly show investment risks in advertisements and provide a balanced view of potential risk and returns. In addition, regulators must receive information on advertising terms. The operators will have 30 days to comply with the new rules.
On the Flipside
The Thai SEC is increasingly becoming more cautious of crypto, as it is coming up with stringent rules and regulations around digital assets.
Why You Should Care
The crypto fallouts experienced by Celsius, Babel and Zipmex posed a threat to investors as withdrawals were suspended. Recently, the Bank of Thailand warned commercial banks against a “direct involvement” in trading cryptocurrencies, citing their high volatility and potential risks.
Know more about Thai SEC’s stringent crypto policies:
Read about the Thai SEC’s recent crackdown on Zipmex: