The Securities and Exchange Commission (SEC) of Thailand wants to protect Thai crypto investors with the new rules obliging virtual asset service providers to improve their risk management policies
On Jan. 17, the Securities and Exchange Commission (SEC) of Thailand issued new regulations demanding virtual asset service providers (VASP) to guarantee efficient crypto custody.
Thus, providers offering crypto storage services should now establish a digital wallet management system. VASPs should also communicate with regulators regarding risk management policies and provide action plans to ensure compliance.
Along with policies and procedures for designing, developing and maintaining digital wallets and keys, the Thai SEC will also require crypto custodians to work out a contingency plan in case of unforeseen events. For instance, VASPs will be obliged to lay out and test action procedures, designate responsible persons and report security incidents.
Moreover, the new regulations require audits of system security and digital forensic investigations on the events affecting the security of customers’ crypto funds.
Crypto custodians are required to fully comply with the new rules within six months from the effective date.
Thailand was the first in the region to implement digital-asset legislation in 2018. The crypto market in the country was booming until recently. However, a turbulent 2022 year brought Thai investors significant setbacks. Thus, Thai investors that used the Zipmex platform were negatively impacted by the Celsius bankruptcy. When FTX collapsed, Asian retail investors also suffered the most.