Thailand will ban the use of customer funds for loans and investments


The Securities and Exchange Commission of Thailand (SEC) recently issued new guidelines that prohibit crypto-service providers (VASPs) from using investor funds for lending and investments. 

The measure was taken to ensure investor protection. The new rules will take effect on July 31, 2023.

The regulator submitted draft rules to stakeholders in September 2022 as a response to the collapse of credit platforms BlockFi and Celsius Network. 

Furthermore, VASPs must also alert customers to any potential risks associated with trading in digital assets.

A warning should appear on all platforms saying:

"Cryptocurrencies involve a significant degree of risk. Please approach [...] with caution, as there is a possibility of losing the entire amount of your investment". 

To comply with the rules, users must review the notice and sign an agreement confirming that they are aware of the potential risks. 

In January 2023, Thailand's SEC required custodial VASPs to set up a digital wallet system. 

In addition, the Central Bank of Singapore required local crypto-exchanges to move customers' digital funds into trusts by the end of 2023.

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