ICO regulation precedes cryptocurrency regulation, the Thai government is racing against the hot token market

The Thai government is concerned that more and more Thai companies are racing to launch their ICOs ahead of regulation. This has prompted the country’s regulators to speed up the development of a regulatory framework for token sales ahead of the regulation of cryptocurrencies.

ICOs are becoming increasingly popular in Thailand  

Private companies listed in Thailand are rushing to launch their initial coin offerings (ICOs) ahead of regulation, Thai Ras reported, adding that they are “worried that regulators will make it more cumbersome for issuers and investors.”

J Ventures, a subsidiary of Jay Mart Public Company Limited, a stock exchange-listed company in Thailand, recently became the first publicly traded company to hold an ICO, selling 100 million digital tokens and raising 660 million baht (about $21 million).

Project Planning Services (PPS) is listed on Thailand's Alternative Investment Market. The company plans to raise about 500 million baht (about $16 million) through the issuance of Profincoin and use the money to expand its factoring business, according to the British Daily News on the 3rd. PPS said it plans to comply with any regulations set by the Thai Securities and Exchange Commission (Thai SEC), which is expected to be announced this month. The news outlet quoted Chonladet Khemarattana, CEO of Fintech (Thailand) Co., Ltd., as saying:

“Profincoin is an asset-backed token that can be defined as securities-like by the Thai SEC.”

Thai fintech startup Stockradars has also announced plans to build a social trading platform; according to Mac Thai, a pre-sale of 120 million tokens will go on sale on March 22.

ICO regulation to come out next week

According to local media reports, Thai regulators are concerned about the growing popularity of ICOs, but there are currently no laws in place to regulate them or cryptocurrency trading in the country.

Ruamrangsri, deputy secretary-general of the SEC, said that the Thai regulator “will consider the regulatory framework for ICOs on March 8.” Krungthep Turakij added that the regulator will discuss proposals regarding ICO regulation, but not cryptocurrencies.

Pornchai Thiraveja, an adviser to Thailand’s Fiscal Policy Office, said know-your-customer (KYC) rules will apply to tokens that are considered securities to protect investors. “Issuers will also need to be licensed,” he was quoted as saying by the Bangkok Post.

Rapee Sucharitakul, secretary general of the Thai Securities and Exchange Commission, said last week that there will be certain standards for information disclosure and transaction reporting. The regulatory framework will also include ICOs’ “system security, transaction objectives and use of proceeds.”

Cryptocurrency regulation is in the works  

As for the regulation of cryptocurrencies, Mr. Pornchai said, “KYC is also required for trading cryptocurrencies.”

He added that the working group on cryptocurrency regulation “will meet in the next three weeks to consider whether existing laws are adequate for ordinary cryptocurrencies.” The news outlet highlighted that the group consists of representatives from the country’s central bank, the Securities and Exchange Commission, the Ministry of Finance, and the Anti-Money Laundering Office. The article conveyed Mr. Sakkarin’s explanation:

“Given that cryptocurrencies are not considered securities, they will not be regulated by the SEC, but a working group of the four agencies is still considering a regulatory framework.”