Thailand’s SEC Proposes Allowing Mutual And Private Funds To Invest In Crypto Products

The Securities and Exchange Commission (SEC) of Thailand introduced a proposal that could enable mutual and private funds to invest in cryptocurrency products.

The move aims to address the growing interest in digital assets among institutional investors, according to the country’s financial regulator .

The proposal will permit funds to increase their investments in crypto exchange-traded funds (ETFs) listed on US stock exchanges. It will provide more crypto-related products to institutional investors and high-net-worth individuals.

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Investment Tokens To be Treated Like Securities

Anek Yooyuen, the SEC’s deputy secretary-general, highlighted that “investment tokens” would be treated similarly to traditional securities like stocks and bonds, given their comparable risk profiles.

He noted that the regulatory framework would be adjusted to facilitate the establishment and management of funds investing in digital assets.

The proposal outlines different regulatory requirements for various types of digital assets, reflecting their varying risk levels. For instance, high-risk assets like Bitcoin will face different regulatory conditions compared to more stable assets, such as stablecoins.

Thailand's financial regulator has proposed allowing private investment funds to purchase Bitcoin and other crypto assets. pic.twitter.com/EkZaVE3SAm

— GOLD (@GOLD) October 10, 2024

Additionally, retail mutual funds would be restricted to a maximum of 15% allocation in crypto investments. In contrast, institutional investors would face no such limits.

The SEC’s proposal also includes a revision of criteria for managing crypto asset funds. This would cover aspects like asset custody, valuation methods, information disclosure, and advertising standards.

Another key part of the plan is the authorization of initial coin offering (ICO) portals, allowing them to work with outsourced companies for fundraising and designing investment projects.

However, the SEC also plans stricter measures against activities like “naked short-selling,” inappropriate trading orders, and market manipulation.

Earlier in the year, the regulator took steps to shut down unlicensed crypto exchanges operating within Thailand. In a broader effort to integrate digital assets into the country’s financial landscape, the SEC is preparing a Digital Asset Regulatory Sandbox.

This initiative involves ten private companies testing projects that facilitate the exchange of crypto assets for local currency, potentially paving the way for legal crypto payments—currently restricted by the Bank of Thailand.

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Thailand Emerging As A Major Crypto Hub

Thailand has solidified its position as a key destination for offshore digital asset investors, despite some past controversies. Just recently, the country’s Finance Ministry announced the exemption of value-added tax (VAT) on digital asset trading.

The decision eliminates the requirement to pay 7% VAT on income derived from cryptocurrency and digital token trading, providing a favorable environment for investors and traders.

The VAT exemption, which took effect in January this year, has no specified end date, offers a long-term incentive for participants in the digital asset space.

In another development, Thailand’s SEC  granted approval to One Asset Management (ONEAM)  to launch the country’s first spot Bitcoin exchange-traded fund (ETF).

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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.