Thailand’s Securities and Exchange Commission has announced that digital tokens issued and offered for transactions, including for decentralized finance projects, must have its approval.
- In a statement issued on Sunday, the SEC cautioned entrepreneurs planning to launch DeFi projects to consider whether their projects involved the issuance of digital tokens, and to obtain the requisite license. Unauthorized issuance of digital tokens and operating a digital asset business without a license is punishable under the Digital Assets Act, the SEC warned.
- The statement was released after DeFi platform Tuktuk Finance, which recently launched on the Bitkub Chain, saw extreme price volatility in its TUK token, which skyrocketed to a valuation of hundreds of U.S. dollars then nosedived to US$1 within the space of just a few minutes, according to a Bangkok Post report.
- This is the first time the Thai regulator has commented on DeFi, the autonomous execution of financial transactions by smart contracts deployed on decentralized blockchains without the need for intermediaries.
- Traders should study DeFi projects before getting involved in their technical and security aspects, the SEC said. The regulator also reiterated the requirement for digital asset operators, including exchanges, digital asset brokerages, digital asset dealers, private fund management firms and investment advisers to be licensed, according to the Emergency Decree on Digital Asset Businesses B.E. 2561 (2018).