Mr. Wongsakrit Khajangson, Mr. Panupan Udomsuvannakul, Ms. Tantigar Hutamai,  Mr. Kanchana Suchato

Introduction

Digital assets (including cryptocurrency and digital tokens), currently governed by the Emergency Decree on Digital Asset Business B.E. 2561, have been adopted widely in Thailand both as a means of payment (“MOP”) for goods and services, and investments. The dramatic growth of the use of digital assets has been a concern for the Thai authorities, particularly the use of digital assets as a MOP. From the authorities’ point of view, the use of digital assets for such purpose may lead to various negative impacts, including cyber espionage and money laundering. Thus, on 18 March 2022, the Thai Securities and Exchange Commission issued a new Notification of the Capital Market Supervisory Board to regulate such matters (the “New Regulation”), which came into effect on 1 April 2022.

Overview of the Regulation

From the New Regulation’s effective date, regulated digital asset business operators under the law will be prohibited from undertaking the activities of operating and facilitating the use of digital assets as a ‘MOP’ (the “Prohibited Activities”). The operators that engaged in Prohibited Activities must have ceased such activities before 30 April 2022.

Prohibited Activities include:

1. advertisements, solicitation, or expressions of readiness to provide services to accept digital assets as MOP;
2. providing systems or tools that facilitate the use digital assets as a MOP;
3. providing digital-asset wallet services for the use of digital assets as a MOP;
4. providing services of transferring Thai Baht from customers’ accounts to account of others;
5. providing services of transferring digital assets from customers’ account to the account of others that are not the customer’s account for the use of digital assets as a MOP; and
6. any other services having the characteristics of supporting the use of digital assets as a MOP.

If a digital asset operator discovers that their clients use their digital asset accounts for payments of goods and services, they must notify the customer of the misuse and violation of the terms of services of the operator. If such action continues, the digital asset operator must take actions against such customer (e.g., temporarily suspend services, cancel the services).

The enactment of the New Regulation requires a dramatic change in the relationship between digital asset business operators and their clients. Investors exploring operations in Thailand should be aware of how the New Regulations may impact their operations.

 

1 - Mr. Wongsakrit Khajangson, Partner
2 - Mr. Panupan Udomsuvannakul, Counsel
3 - Ms. Tantigar Hutamai, Senior Associate
4 - Mr. Kanchana Suchato, Associate

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