Thailand Closer to Regulating ICOs

The Thai government will announce regulations for cryptocurrencies and initial coin offerings (ICOs) by the end of March.

This followed news earlier last week that two laws were being drafted and that an announcement could come as early as this week. The first draft of the new laws was passed by the cabinet on March 13 but, according to the Bangkok Post, the legislation must be further reviewed by the Council of State, an advisory body reporting to the prime minister on legislative matters, before being re-submitted to the cabinet for final approval.

Finance Minister Apisak Tantivorawong was quoted by Thai media over the weekend as confirming that the government was preparing to announce regulations for cryptocurrencies and initial coin offerings (ICOs) by the end of this month.

His comments followed a recent meeting of various government agencies that included the Securities and Exchange Commission, Finance Ministry, the Anti-Money Laundering Office, and the Bank of Thailand (BoT) that agreed it has become necessary to define and regulate cryptocurrency, Thai Rath, a news publication, reported.

Apisak was quoted by Bangkok Post in February as saying that the government will not ban crypto trading but will work on constructing a regulatory framework for digital currencies.

BoT governor Veerathai Santiprabhob had, on Feb 12, released a circular banning banks in Thailand from investing and trading in crypto, as well as participating in and creating exchanges and platforms for crypto trading, Reuters reported.

The central bank said in the same circular that cryptocurrencies were not legal tender. It is unclear how the new laws to be announced by the end of this month will affect this ban.

Thailand’s move comes as fellow Southeast Asian countries also consider regulation for cryptocurrencies and ICOs. Malaysia is also considering a regulatory framework for cryptocurrencies while Singapore, already a well-known hub for cryptocurrencies, will regulate activities surrounding “virtual currencies” if they pose specific risks.

There was speculation earlier that the Thai government was mulling the use of section 44 of the Interim Constitution of 2014 that empowers the National Council for Peace and Order, the junta that came to power following the May 2014 coup, to issue an order.

A deputy prime minister, Wissanu Krea-ngam, was quoted by Thai Rath as saying that there was no need to invoke section 44 since normal regulations will suffice.

Another deputy prime minister, Somkid Jatusripitak, says following a cabinet meeting last week that the two laws involved registration of cryptocurrency operators, including know-your-customer rules, and a revision of the country’s taxation rules to include cryptocurrencies and ICOs.

He says an act will be drafted for digital asset businesses including agents, dealers, and brokers of cryptocurrency operators that requires them to register and have know-your-customer rules. The act includes penalties and remedies for violations.

He says there will also be a revision to the tax code to include revenue from cryptocurrencies and ICOs.

Leon Dean