In a groundbreaking development, the Securities and Exchange Commission (SEC) of Thailand has lifted investment restrictions on certain digital assets, specifically real estate-backed Initial Coin Offerings (ICO) and infrastructure-backed ICOs. The change, effective from January 16, 2024, signifies a departure from the previous cap of 300,000 baht (approximately $8,400) per individual investor for such ventures.
The decision to lift these investment restrictions stems from the SEC Committee’s resolution during its meeting No. 5/2023 on March 2, 2023. The committee greenlit principles aimed at refining the criteria for investing in digital tokens, offering custodial services for digital assets, and establishing criteria related to digital asset business operations. This strategic move seeks to implement robust investor protection mechanisms commensurate with the risks associated with digital assets, while also supporting technological advancements in fundraising.
Paving the Way for Innovation
A significant aspect of this regulatory shift involves the removal of investment restrictions for retail investors in digital tokens backed by real estate or real estate income streams (real estate-backed ICO) and those supported by infrastructure operations or revenue streams from infrastructure operations (infra-backed ICO). The previous limit of 300,000 baht per offering for retail investors has been rescinded, aligning with the inherent risks of these products and encouraging the use of digital technology in fundraising.
Furthermore, the SEC will conduct a thorough review of criteria supporting the establishment of custodial wallet provider businesses. These entities will be authorized to provide services to digital asset operators, particularly those with major shareholders who may be listed companies or subsidiaries within a group of companies possessing expertise and experience in securely storing clients’ securities or financial assets. The criteria will also ensure compliance with the SEC’s specified independence standards.
Digital asset business operators seeking to diversify into additional businesses will now be required to obtain permission from the SEC before proceeding. This regulatory measure aims to enhance the monitoring of diverse business operations, ensuring greater efficiency and regulatory oversight. In addition to these changes, digital asset business operators are mandated to adhere to improved service standards.
They are prohibited from providing services through digital asset operators that operate illegally, contributing to the overall quality and reliability of the digital asset market. The SEC’s detailed criteria, as outlined in the announcement, have been officially published in the Royal Gazette, marking a significant step towards creating a regulatory environment in Thailand that encourages technological innovation while safeguarding the interests of investors in the dynamic realm of digital assets.
