Thai SEC bans the use of customer crypto assets for lending and investment

Thailand’s Securities and Alternate Fee has issued new guidelines for digital asset service suppliers specializing in investor safety. 

The brand new tips require digital asset service suppliers to supply sufficient warnings highlighting dangers related to cryptocurrency buying and selling. All platforms should show a message that reads:

“Cryptocurrencies are excessive danger. Please examine and perceive the dangers of cryptocurrencies completely, as a result of chances are you’ll lose your entire funding quantity.”

The warning message should be clearly seen, and earlier than clients can use the service the enterprise operator should prepare for the service customers to offer consent and acknowledge such dangers earlier than utilizing the service.

Aside from a buying and selling dangers disclaimer, the brand new tips additionally prohibit service suppliers from utilizing buyer’s funds for lending or funding.

The Thai SEC has banned crypto lending providers, thus prohibiting crypto platforms from providing any type of return on deposited crypto by clients. This might  improve safety for buyers from the dangers of such lending providers. The brand new laws are set to return into impact from July 31, 2023.

The dialogue round new laws for investor safety started on September 1, 2022, when the SEC accepted the necessity for safety warnings by cryptocurrency enterprise operators to reveal the dangers of buying and selling cryptocurrencies. The foundations that prohibit digital asset enterprise operators from offering providers or supporting deposit-taking and lending services were discussed during meetings on December 1, 2022, and Could 11, 2023.

Associated: Crypto exchange Bitkub targeted by Thai SEC with wash trading claims

The brand new investor safety guidelines come within the wake of the huge crypto lending disaster throughout the bear market in 2022. A major chunk of crypto lending corporations, who collected billions in buyer deposits by promising hefty returns, went bust throughout the bear market. Main lending corporations, together with Celsius and BlockFi, filed for chapter – leading to investor cash getting caught in chapter proceedings.

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