The Thailand Securities and Exchange Commission (SEC) has barred domestic cryptocurrency companies from providing staking and lending services to clients. The ban aims to protect traders and the public from the risks related to cryptocurrency activities.
Thai SEC bars local exchanges from staking and lending services
The ban imposed by the Thai SEC aims to protect traders and the public from the risks of engaging in these activities. Thailand is one of the most active cryptocurrency countries. Earlier this year, local authorities said that they were planning to start taxing transactions made using Bitcoin and other cryptocurrencies. They later banned the use of cryptocurrencies for payments.
A press release by the Thailand SEC issued a ban on local crypto firms, ordering them to refrain from offering and supporting digital asset depository services like staking and lending. The regulator also hoped the move would offer maximum protection to local investors interacting with crypto assets.
The regulator has also said that enforcing this ban was essential because many foreign companies had experienced issues with liquidity over the past few months. One of these examples is the Celsius crypto lender that halted withdrawals in June before filing for bankruptcy a month later.
Following the collapse of Celsius, other crypto firms also started going under as the crypto winter persisted and prices kept plunging. Another cryptocurrency lender that also halted withdrawals is Babel Finance. The form halted all withdrawals because of liquidity issues. Shortly after this move, rumors surfaced that the lender had delayed debt repayments after settling with some leading clients and partners.
However, it is not only foreign organizations that have been affected by the ongoing crypto winter. In July, Zipmex, a digital asset exchange, announced halting client withdrawals on its platform. A week later, the exchange, based in Thailand, filed for moratorium relief seeking to prevent creditors from making claims of their funds over the next six months.
Crypto framework in Thailand
In 2021, the Thai regulatory bodies were determined to support the growth of the cryptocurrency sector in the country. The Tourism Authority of Thailand unveiled plans to launch a utility token known as the TAT coin that supports the transfer of vouchers and supports tour operators by providing them with liquidity.
At the time, the tourism agency governor said that digital assets were transforming the world and that they would support Thailand in getting back on its feet after the pandemic affected the tourism sector.
Earlier this year, Thailand was conflicted on taxation applicable to different activities such as cryptocurrency mining, trading, and transacting. The considerations regarding this tax resulted in the removal of a 15% withholding tax imposed on digital asset transactions.
Another notable regulatory change was in April when legislators in the country banned the use of cryptocurrencies for payments for goods and services.