Thai Regulators Seek Stricter Oversight of Crypto Company Financial Backers
The Securities and Exchange Commission of Thailand has unveiled plans to expand regulatory oversight of cryptocurrency firms by requiring approval for indirect financiers and backers of major shareholders.
In an effort to combat technology-related criminal activities and money laundering, Thailand's securities watchdog is moving forward with plans to strengthen funding regulations governing cryptocurrency enterprises operating within the country.
On Monday, the Securities and Exchange Commission of Thailand (Thai SEC) put forward a regulatory proposal that would broaden the scope of approval requirements for digital asset businesses to encompass those providing financial support to principal shareholders.
According to the proposed framework, individuals or entities offering backing or financial resources to major shareholders would themselves be classified as shareholders subject to mandatory regulatory clearance from the commission.
The regulatory initiative seeks to strengthen supervision over concealed capital movements and guarantee that business entities receive funding from lawful sources, as opposed to financing connected to illegal operations, which could present legal, credibility and reputation-related hazards, according to the regulator's statement.
This initiative is consistent with a growing regulatory pattern across Asian jurisdictions, with comparable measures being explored in South Korea, where authorities are evaluating proposals to limit ownership stakes in cryptocurrency exchanges to a maximum of 20%.
Share acquisition-based indirect support would be subject to new regulatory framework
The proposed regulations governing funding sources encompass a broad spectrum of financial backers, including not merely those providing funds or financial assistance to direct shareholders, but equally those offering such support indirectly via share purchase transactions.
The regulatory framework applies to the purchase of shares in business operators themselves, in addition to shares in legal entities that hold ownership positions in such operators.
"The provision of significant funding shall include guarantors, contractual arrangements, or investments in any instruments that result in the financial supporter having the status of, or acting in substance as, a funding provider to such major shareholders," the SEC said.
In circumstances where a major shareholder is an entity affiliated with the government, including ministries, departments, public organizations or similar agencies, the commission will conduct reviews solely at the entity level. "These entities are already subject to government supervision and oversight," the regulator said.
The proposed regulatory framework has been released for public feedback and consultation, with the comment period remaining open until April 22.
Authorities in Thailand have been intensifying their initiatives to fight financial criminality in recent months. During January, regulatory bodies in the country unveiled a "gray money" initiative designed to enhance oversight throughout both traditional and digital marketplaces as part of broader efforts to eliminate money-laundering vulnerabilities.
As a result of coordinated actions by the Thai SEC and the Thai Digital Asset Operators Trade Association, cryptocurrency exchanges operating in Thailand have reportedly suspended 10,000 user accounts in connection with an anti-money laundering enforcement operation.