The ban applies only to retail investors and does not prohibit cryptocurrency exchanges from offering margin trading or lending services to institutional clients.
On July 3rd, the Securities and Exchange Commission of Thailand announced a ban on cryptocurrency exchanges providing lending and deposit services to retail customers.
Prior to Thailand, the Monetary Authority of Singapore (MAS) also unveiled new measures to safeguard investors, requiring cryptocurrency exchanges to transfer all customer assets into Trust Accounts by the end of 2023.
This measure aims to prevent cryptocurrency exchanges from commingling customer funds and minimize the risk of situations like the one seen with FTX, reducing the potential for disorderly outcomes.
Similar to Singapore, the actions taken by the regulatory authorities in Thailand demonstrate their priority of investor protection. However, in contrast to retail investors, the ban does not prohibit cryptocurrency exchanges from engaging in derivatives trading and providing lending services to institutional customers.
The Securities and Exchange Commission (SEC) of Thailand has issued a mandatory risk disclaimer statement. Cryptocurrency exchanges are required to disclose trading risks to customers using clear and comprehensive language.
The regulatory authority of Thailand first banned cryptocurrencies as a form of payment in March 2022. The authority cited concerns about the potential financial instability risks that cryptocurrencies could pose to the country’s economy.