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BY CNA Team - November 29, 2018

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No regulatory framework for Thai STOs yet

Tipsuda says the SEC will deal with STOs on a case-by-case basis
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Thai regulators are still undecided on how to deal with security token offerings (STOs) as they could fall under Securities Act or the newly passed Digital Asset Management Act.

STOs are becoming more popular for blockchain startups to raise funding versus initial coin offerings (ICOs), which have come under increasing scrutiny from regulators everywhere in recent months.

But Thai regulators will have to eventually confront the issues, given that at least one Thai firm, Satang Corp, has announced plans to raise funds via an STO early next year.

The firm will file with US securities regulators and list on tZero, a US crypto exchange owned by e-commerce firm Overstock.

Bangkok Post says in a Nov 29 report that there is no regulatory framework for STOs at the moment.

The country’s Securities and Exchange Commission (SEC) has jurisdiction over the stock market and other securities under the Securities Act while ICOs fall under the Digital Asset Management Act, which came into force on July 16.

However, the SEC issues licenses to blockchain firms that want to conduct ICOs after the Finance Ministry approves them.

The SEC’s deputy secretary general Tipsuda Thavaramara says the regulator will have to consider how to deal with STOs for issues such as share ownership, voting rights and dividends.

“The SEC will have to consider carefully how to respond to each STO,” she says, adding that the regulator has not decided whether STOs fall under the Securities Act or the Digital Asset Management Act as much will depend on the STO’s conditions and its white paper’s details.

Tipsuda says companies with Thai investors who wish to conduct such STOs overseas will be guilty of wrongdoing as they will be seen as avoiding regulated fund-raising channels such as sales of shares or sales of digital assets via ICO portals.

Ever since the Digital Asset Management Act came into operation, the news publisher says the SEC has yet to issue any licenses to companies wishing to conduct ICOs.

Besides licenses for ICOs, there are licenses for crypto exchanges and for dealer businesses too.

Image courtesy of SEC website.

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