Thailand Enforces Cryptocurrency Legislation

Virtual currency traders who fail to register within 90 days face fine, jail term

by Marin Marinov
15 May • 2.5 min
In Regulation

Thailand has officially introduced cryptocurrency regulations aimed at preventing money laundering, tax evasion and related crimes, local media reported. The Royal decree is in full effect after being published in the official gazette this Sunday.

All trades in virtual currencies should register within 90 days at Thailand’s Securities and Exchange Commission (SEC) or face fines and possible jail term. The regulations define cryptocurrencies as “digital asset and digital tokens”.

“It was not meant to prohibit cryptocurrencies, initial coin offerings and other digital asset-related transactions, but to protect investors,” Thailand`s Finance Minister Apisak Tantivorawong told the Bangkok Post.


The rules

Thailand’s new laws oblige SEC to regulate and oversee crypto market and impose fines that should not be more than twice the value of the digital coin or at least BAHT 500 000 (around USD 15 700). The offenders may also face up to two years in jail.

The legislation will be expanded towards all private cryptocurrency exchanges, dealers, and brokers, which also should be registered. The framework was drafted by the government in March and after that amended by the military body, Council of State, as the country is governed by a military junta since 2014 coup d'état.

“They [military government] have to be cautious not to allow their conservative instincts to result in draconian regulations”, Korn Chatikavanij, a former finance minister, who currently serves as the chairman of the Thai Fintech Association, told Nikkei Asian Review.


Thailand' king Maha Vajiralongkorn

In March, the Finance Ministry proposed a 7% value-added tax (VAT) for cryptocurrency trading and 15% capital gain tax for returns but the idea was put on hold after negative reactions from the Thai crypto community. Meanwhile, Thailand’s central bank banned local banks from crypto trading and investment, awaiting new rules for cryptocurrency exchanges.


Thailand and ICOs

Another new framework, aimed at Initial Coin Offerings (ICOs), should also be introduced by the government.

“The regulations to supervise ICOs and transactions will be handled by the SEC, thus any companies that want to raise funds by offering ICOs to investors or companies that operate ICO trading are required...,” SEC Secretary-general Rapee Sucharitakul said in March.

SEC study has found that 95% of Thai ICOs are failures while 5% generate high returns. In February, TDAX, one of the country’s largest cryptocurrency exchanges, suspended ICO token trading “due to uncertain regulations that may be announced soon”.