The agency is currently in the process of improving digital asset governance and the modifications are expected to mirror the supervision of international regulators.
The FTX collapse spurred action from yet another financial watchdog. The Thailand Securities and Exchange Commission (SEC) is gearing up to impose more stringent regulations on crypto assets similar to that of the global market in a bid to protect investors.
According to Bangkok Post, the SEC said that regulators should play a greater role in enhancing investor protection mechanisms.
- The regulator has established a working committee consisting of relevant government agencies and private sector representatives to study and propose ways to enhance the laws to adapt to the market.
- The use of decentralized ledger technology (DLT) in business will also be a focus of the recommendation.
- Monitoring new potential risks and investor protection will take the center stage.
- The SEC has also asserted that matters relating to governing advertisements and product promotions, preventing conflicts of interest, as well as strengthening cybersecurity will be addressed with effective regulations.
- The collapse of the algorithmic stablecoin in the Terra ecosystem triggered the fall of a slew of crypto lenders, such as Three Arrows Capital, creating a credit crunch in the ecosystem.
- However, the severity of the market downturn was only known after the unraveling of FTX, which prompted a massive reduction in capital inflows.
- There is also an increased threat that some of the existing centralized exchanges could follow suit. These events highlight the vulnerability of the digital asset industry and the lack of proper oversight, according to the Thai SEC.
- The latest development comes three months after SEC issued a statement asking cryptocurrency companies to include clear and visible warnings about the risks associated with virtual tokens and crypto investments.
- The regulator had also warned the companies operating in the country to abstain from giving false and misleading information in their ads.
- News Source