Thai SEC proposes new regulations that could halt digital currency lending
The Thai securities regulator is seeking to further tighten its hold on the digital currency industry, this time proposing new regulations for the custodians and lenders. Aside from becoming more stringent on the withdrawal of digital assets held by custodians, the watchdog is seeking to prohibit digital asset lending.
Thailand’s Securities and Exchanges Commission (SEC) published the new draft regulations on Wednesday, inviting the public to give their feedback before they move on to the legislators. It claimed that the new proposals seek “to strengthen the oversight of digital asset business operators with a focus on continued quality development and investor protection reliability of such business operators.”
One of the proposals is in regards to custody of fiat money, with the SEC proposing that withdrawals and transfers comply with decentralized approval authority principles, multi-sign approval authority and check and balance.
In what could have an even bigger impact on the market, the SEC proposed that “the use of a client’s assets for the benefit of another client or other persons shall be prohibited.” Firms could deposit the assets with a commercial bank and agree on the interest rate with the client. This rate can’t exceed the rate they receive from the commercial banks.
“In case of digital assets, seeking benefits for clients shall be prohibited, including in the form of digital asset lending to other persons,” the SEC stated.
This proposal could have a big impact on the digital asset lending industry, a sector that’s been growing aggressively in the past few years. BlockFi, one of the biggest digital asset lenders, is now valued at $3 billion after raising $350 million in March this year. It has, however, been mired in regulatory issues for months now, with the New Jersey securities regulator giving it till September 2 to cease and desist from the state.
“Business operators shall comply with the additional regulations above within one month as from the effective date of the regulations,” the SEC stated.
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