Thai SEC’s Official Statement
The Thai SEC officially announced Wednesday the regulations for ICOs, which will take effect from July 16, according to local media.
The ICO regulations fall under the Digital Asset Management Act BE 2561 which regulates cryptocurrency in the country, Thai Rath newspaper quoted Mr. Rapee Sucharitakul, Secretary-General of the Thai SEC, explaining.
Along with the announcement, the Commission has published a series of infographics to explain the regulations which are shown below.
Mr. Rapee detailed, as reported by Prachachat Turakij, “those wanting to launch an ICO must undergo screening from an ICO portal. So, initially, the SEC will first approve ICO portals.” A platform wanting to operate as an ICO portal must apply for approval from the Commission which can take up to 90 days. “Once the portal has been approved, the SEC will begin to consider applications for the issuance and sale of digital tokens,” he clarified.
An ICO portal applicant must be a Thai company with registered capital of at least 5 million baht (~US$150,636). Citing that ICO portals must identify “investors’ status, identity, and risk-taking ability,” the Bangkok Post elaborated:
ICO portals’ management structure and personnel must be adequate for business operations. They are also required to be prepared to evaluate ICO issuers’ business plans and the distribution structure of digital tokens as well as perform checks to ensure that computer code, or source code, matches the disclosed information.
Furthermore, the news outlet quoted Mr. Rapee saying, “the SEC is pleased to immediately discuss details with those who would like to be approved as ICO portals in order for them to be prepared for the regulatory framework.”
Anyone wanting to launch an ICO in Thailand will first need to obtain an approval from an ICO portal before applying with the SEC. Upon obtaining an approval from an ICO portal, a would-be issuer can subsequently apply with the SEC, supplying details of the ICO. The SEC can take up to 60 days to make a decision.
In a statement to Reuters, the Commission explained that “issuers of digital tokens must be a company registered under Thai law and will be able to offer such assets of an unlimited amount to institutional investors, ultra high net-worth investors, venture capital and private equity firms,” adding:
Issuers of such tokens can accept baht or cryptocurrencies, including bitcoin, bitcoin cash, ethereum, ethereum classic, litecoin, ripple and stellar.
Who Can Invest in ICOs in Thailand
The SEC has also set rules on who can invest in ICOs, divided them into four groups. The first consists of institutional investors. Ultra-high net worth investors make up the second group, which the SEC defines as retail investors with net worth of at least 70 million baht (~$2.1 million) or those with investments of at least 25 million baht (~$752,785). The third group consists of venture capitalists and private equity firms. The last group comprises other retail investors, but their investment is capped at 300,000 baht (~$9,034) per person and per ICO project, “or no more than 70% of total value of offered tokens,” the Bangkok Post added.
As for taxation, the country’s finance minister, Mr. Apisak Tantivorawong, said in March that “the finance ministry will impose a 15% withholding tax on gains from digital tokens and cryptocurrency trade,” Reuters reiterated, adding that “there will also be a 7% value-added tax, but general investors will be exempted.”