Thailand plans to overhaul its digital rules

The move to tighten the rules comes after Thai authorities were criticised for not acting promptly to protect investors at Zipmex (Thailand) Ltd that briefly suspended coin withdrawals

Thailand plans to overhaul its digital rules to confer more powers on the central bank, and tighten the oversight of platforms offering cryptocurrencies and other tokens, after a recent market rout left retail investors reeling from losses.

The planned amendments to the regulations will ‘bring the central bank to be part of it’, Finance Minister Arkhom Termpittayapaisith said in an interview. The Securities and Exchange Commission (SEC), which currently has the sole mandate to supervise the industry under the rules passed in 2018, had been asked to take the lead on the overhaul, he said.

The move to tighten the rules comes after Thai authorities were criticised for not acting promptly to protect investors at Zipmex (Thailand) Ltd, a licensed cryptocurrency exchange that briefly suspended coin withdrawals.

While the platform has since lifted most of the freeze on transactions, it has filed for a moratorium in Singapore for protection from creditors against any lawsuits, and to buy time for raising funds.

Right now, the central bank has no room to enter into the regulatory framework except for notifying that cryptos are not a legal means of payment for goods and services, Arkhom said on Monday. The framework is not clear enough to regulate the industry.

Almost $2 trillion has been wiped off the global crypto market since a peak in November last year in an implosion exacerbated by rising interest rates. Leveraged funds and lending platforms blew up along the way, exposing regulatory gaps that officials worldwide are now rushing to plug.

In Thailand, the number of active trading accounts shrank to about 230,000 from a peak of almost 700,000 in December, official data show.