Thailand’s SEC to require DeFi projects to obtain license first before token issuances

The Thailand Securities and Exchange Commission (SEC) recently announced it may soon require decentralized finance (DeFi) projects issuing cryptocurrencies to first acquire corresponding licenses.

According to Cryptoslate, the Asian regulatory body said, “The issuance of digital tokens must be authorized and overseen by the Securities and Exchange Commission,” adding the issuer is required to “disclose information and offer the coins through the token portals licensed under the Digital Asset Decree.”

The announcement came shortly after DeFi yield farming platform Tuktuk Finance of Thai crypto exchange Bitkub launched last Sunday, with its native TUK token surging to several hundred dollars before ultimately plunging to just around $1.

First time for Thailand SEC

According to some sources, this is the first time that the SEC in Thailand issued official statements concerning DeFi) In fact, before this, there was no clear guideline as to what office was supposed to oversee the sector.

With the new development, the commission emphasized that operators of DeFi projects should give ample consideration to existing regulations prior to the issuance of any tokens. Retail users are also urged to research all technical and security aspects of protocols before deciding to invest in them.

A reasonable warning

AI-advisor app AVA Advisor Chief Executive Officer Niran Pravithana defended the recent move of the Securities and Exchange Commission.

The executive regarded the warnings of the regulatory agency as reasonable, citing the cases of unsuspecting retail investors that fall prey to numerous fraudulent projects that are up to no good, taking away funds in an instant.

Pravithana also offered some explanation on how the modus of these fraud projects work. He said these malicious individuals can hide in messenger application Telegram and manipulate the token prices, noting that these illegal activities can easily go undetected by authorities, giving perpetrators all the opportunity they need to carry out their bad plans.

 

Image courtesy of Cointelegraph News/YouTube

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