Thailand to Oversee Token Offerings
Leila Chin
Thailand has bolstered its oversight powers to initial coin offerings (ICOs) after the country’s Securities and Exchange Commission (SEC) recently unveiled its new regulations governing token offerings and those who can participate in ICOs in the country.
New regulations will take effect beginning July 16, according to local media reports.
For those who plan “to launch an ICO must undergo screening from an ICO portal. So, initially, the SEC will first approve ICO portals,” Rapee Sucharitakul, secretary-general of the Thai SEC, said in a statement. Any platform seeking to run an ICO platform must seek the Thai watchdog’s approval.
Approval process for ICOs may last for 60 to 90 days. Upon securing the regulatory approval, the Thai SEC will start taking in applications “for the issuance and sale of digital tokens,” he said.
A report by the Bangkok Post said an applicant should have a registered capital of at least 5 million Thai baht ($150,636). ICO portals should also reveal investors’ identity, status, and risk-taking capacity.
“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,” the report added.
The SEC said prospective issuers of virtual token should be a registered entity under existing laws and be able to offer such services to all types of investors. “Issuers of such tokens can accept baht or cryptocurrencies, including bitcoin, bitcoin cash, ethereum, ethereum classic, litecoin, ripple and stellar,” the watchdog told Reuters.
Investing in ICOs is open to any investor provided that investor meets the requirements set forth by the Thai SEC, which divided the ICO participants into four groups.
The first group is institutional investors, while the second group is ultra-high net worth investors who have a net worth of at least 70 million baht or $2.1 million, or investment of at least 25 million baht or $752,785. The third group is venture capitalists and private equity companies, while the last one is retail investors with an investment of 300,000 baht or $9,034 each and per ICO project.
In terms of taxation, the country’s finance ministry had said it would levy a 15 percent withholding tax on earnings from virtual tokens and digital currency trades. It is on top of the 7-percent value-added tax although general investors will no longer need to pay taxes.
“The Revenue Department will waive value-added tax for people trading in cryptocurrencies on exchange markets approved by the Securities and Exchange Commission (SEC),” Saroch Thongpracum, director of legal affairs of the country’s Revenue Department, said in May. Saroch added this would alleviate the tax burden of general investors.
The Thai regulator “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,” the news item said, quoting Rapee.
