Thailand SEC Bans Crypto Payments, Requests Disclosure of Exchange System Failures

In an ongoing effort to create a regulated crypto market for the general public, the Thailand Securities and Exchange Commission (SEC) has announced a ban on the use of cryptocurrencies for payments. At the same time, the Commission has proposed a new rule requiring disclosure of service quality and IT usage information from crypto companies, including brokers, exchanges and dealers.

According to the Thai SEC’s report, companies in the region have been advised against accepting crypto payments from April 2022 after discussing its implications with the Bank of Thailand (BOT).

The joint study conducted by the BOT and SEC concluded that:

†[Crypto payments] can affect the stability of the financial system and the overall economic system, including risks to people and businesses.”

Some of these risks highlighted by the SEC include loss of value caused by price volatility, cyber theft, money laundering and the leakage of personal information. Once implemented, companies in Thailand will be banned from advertising – accepting crypto payments and setting up systems, tools and wallets to facilitate crypto transactions.

Companies that fail to comply with the new crypto laws will be subject to legal action, including temporary suspension or cancellation of services:

“However, the BOT and the SEC, as well as other government agencies, recognize the benefits of technologies behind digital assets such as blockchain and value and support the use of technology to drive innovation.”

Moreover, the Thai SEC proposal aims to further ensure investor safety by measuring the quality of services provided by the crypto firms. According to a rough translation, the SEC is proposing digital asset operators to:

“Prepare and deliver [service quality and system capacity utilization reports] monthly within the 5th of the following month to the SEC office.”

In addition to sending monthly reports to the Thai SEC, the proposal also instructs crypto firms to publish the reports on their official website within the same timeline.

A chart shared by the SEC further highlighted several complaints received over the past 12 months regarding system outages, services not meeting the desired conditions, shopping and others. Based on the data, Thai investors faced the biggest problems related to shopping, which could be one of the main reasons for the crypto payments ban.

As Cointelegraph reported earlier in December 2021, Thailand’s government confirmed it is working to prepare a new regulatory framework by defining “red lines” for the crypto industry.

Related: Thailand Reportedly Exempts 7% Crypto Tax for Traders on Authorized Exchanges

In the first week of March, Thailand’s Ministry of Finance reportedly relaxed crypto tax rules in an effort to boost investment in digital assets.

According to a report by Cointelegraph on the matter, the new tax policy exempts crypto traders from the 7% value-added tax (VAT) when trading on authorized exchanges. In addition, the revised tax policy will also allow traders to offset their annual losses against gains from their crypto investment in multiple digital assets.

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