The Securities and Exchange Commission (SEC) has amended the regulations on the initial coin offering (ICO) of investment token, digital asset custodial wallet provider, and other provisions related to digital asset business operations. The amendments aim to ensure adequate and appropriate oversight mechanisms for digital asset businesses, strengthen investor protection, and support the use of digital technology in fundraising for the benefit of national development. The amendments have become effective since 16 January 2024.

On 2 March 2023, the SEC Board Meeting No. 5/2566 passed a resolution approving in principle the proposed amendments to the regulations regarding the ICO of investment token, digital asset custodial wallet provider, and other rules related to the digital asset business operations. The main objectives of the proposed amendments were to build an adequate and appropriate investor protection mechanisms in alignment with associated digital asset risks, while continuing to support the use of technology in fundraising and to promote the development of innovation for sustainable growth of the capital market and the digital economy. The SEC conducted a public hearing to seek stakeholders’ comments and suggestions on the principles and the proposed amendments in September 2023. Most of the respondents shared opinions that were aligned with the principles and the proposal.     

The SEC has therefore issued two notifications on the amended regulations related to the ICO of investment token, digital asset custodial wallet provider, and other relevant regulations on digital asset business operations. The key points of the amendments are as follows:  

(1) Supervision on the ICO of Investment Token: Revoking the investment limit of retail investors in case of digital tokens backed by real estate or income streams from real estate as the underlying (real-estate backed ICO) and digital tokens backed by infrastructure or income streams from infrastructure as the underlying (infra-backed ICO). Previously, the investment limit of retail investors was not exceeding 300,000 baht per person. This is to align with the product risks and promote the use of digital technology in fundraising; 

  (2) Promoting the Entry of Digital Asset Custodial Wallet Providers: Reviewing the regulations to support digital asset custodial wallet providers by allowing the custodial wallet providers that are listed companies or subsidiaries in the group, who have expertise, experiences, and readiness in custody of securities and other financial assets and in managing associated risks, to be able to provide services to related digital asset business operators. This is for the case that they have common major shareholders if they are able to comply with the independence criteria as specified by the SEC Board;   

(3) Undertaking of Other Businesses: Requiring any digital asset business operators who wish to undertake other businesses to obtain an approval from the SEC before proceeding in order for the SEC’s efficient monitoring of digital asset business operations;     

(4) Improvement of Service Standards: Prohibiting digital asset business operators from providing services through any digital asset business operators who operate illegally. This is to enhance the quality and the credibility of the overall digital asset market.  

The notifications on the amended regulations have been published in the Government Gazette and have taken effect since 16 January 2024.