Thailand’s SEC seeks to prevent VASPs from offering encrypted pledge and lending services

03/10/2023 09:23 • Metaverse & Beyond • 85 views

On March 10, the Securities and Exchange Commission of Thailand officially announced on March 8 that it was seeking public opinions on a draft regulation prohibiting virtual asset service providers (VASPs) from providing or participating in any type of encrypted pledge and lending transactions.

Thailand SEC solicits public opinions on the ban on cryptocurrency lending and pledge

Analysis based on this information:

The Securities and Exchange Commission (SEC) of Thailand recently announced its plan to prohibit virtual asset service providers (VASPs) from providing or participating in any type of encrypted pledge and lending transactions. The draft regulation was made public on March 8, and the SEC has invited public opinions on the matter until March 24. The decision to regulate encrypted pledge and lending transactions appears to be motivated by concerns over fraud and financial instability in the virtual asset market.

The proposed regulation defines a virtual asset as any digital asset with such characteristics as having value, being negotiable or transferable, and not being legal tender. It requires VASPs to obtain a license from the SEC before being allowed to operate in Thailand. The license will be issued only to those VASPs who can prove their financial and technical capabilities, including having adequate infrastructure and personnel to ensure the security of their customers’ assets. VASPs that obtain the license are allowed to provide services related to the trading and exchange of virtual assets, but not pledge or lend them.

Encrypted pledge and lending services enable VASPs to use their customers’ virtual assets as collateral for loans or other financial services. However, this type of transaction is not yet fully regulated in many jurisdictions, leading to concerns over investor protection and systemic risk. In Thailand, there have been reports of scams and fraud involving virtual assets, with some cases resulting in substantial losses for investors.

The SEC’s proposal is in line with the global trend of regulating the virtual asset market, as seen in recent years in countries such as Japan, South Korea, and Singapore. The regulation is intended to enhance transparency and reduce risks associated with virtual assets, while promoting the development of the industry. However, some critics argue that the regulation may stifle innovation and hinder the growth of the virtual asset market.

In conclusion, the proposed regulation by the SEC of Thailand seeks to prevent VASPs from offering encrypted pledge and lending services in order to reduce risks associated with virtual assets. While it may be viewed as a setback for the industry, it is in line with global efforts to regulate the virtual asset market and enhance investor protection. The public opinions and feedback on this draft regulation are being collected by the SEC until March 24.

This article and pictures are from the Internet and do not represent qiAiAi's position. If you infringe, please contact us to delete:https://www.qiaiai.com/metaverse/8498.html

It is strongly recommended that you study, review, analyze and verify the content independently, use the relevant data and content carefully, and bear all risks arising therefrom.