Thailand’s SEC revises net capital rules for crypto businesses

Four months after approving 13 crypto services in Thailand, the country’s Security and Exchanges Commission (SEC) made changes in their net capital rules for businesses included in the digital assets sector.

Many believe that the changes in the rules will help increase the volume on Thailand Stock Exchange (SET) and Thailand Futures Exchange (TFEX), including other crypto brokers.

It was only in July 2019 when the Thai SEC approved four cryptocurrencies to be invested in initial coin offerings (ICO). These exchanges were Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), and Stellar (XLM).

The Royal Decree on the Digital Asset Businesses B.E. 2561 of Thailand explains the regulation of crypto services. It also highlights three forms of digital assets namely ‘digital asset exchange’, ‘digital asset broker’, and ‘digital asset dealer.’

The updated criteria made by the SEC aims to grow market liquidity and promote the development of new companies. According to the updated regulations, digital assets are still considered as capital funds. However, 50% of the asset value will be the maximum sum determined in digital assets for the overall necessary capital of a business.

According to the report by The Bangkok Post, the revision of the rules will ‘support the rising trading volume, the SEC revised its net capital (NC) rules for securities and derivative brokers to increase liquidity management in case of emergencies and adjust the risk value to be in line with the current market conditions and support digital business.’

Thailand’s SEC requires securities firms to keep 1% of capital funds in cold wallets and 5% of the hot wallets’ asset valuation. A 500,000 baht shareholder’s equity is required for companies that have crypto holdings. The increase in the net capital is analogous to what the SEC of U.S.A made when fundraising limits for businesses were increased.

As of today, Thailand has a total of 15 approved cryptocurrency companies. Eight companies conduct crypto exchanges namely: