Issued by the Securities and Exchange Commission of Thailand, acting by its authority under the Emergency Decree on Digital Asset Businesses of 2018 Notice No. KorThor 19/2565 Re: Rules, Conditions and Procedure for running a digital asset business (#17) on August 18, 2022, revising the rules governing the employment of introducing broker agents and the promotion of cryptocurrencies by digital asset operators in Thailand. A summary of the rules, effective September 1, 2022, are as follows:
Introduction of Broker Agents
The Regulations define an “Introducing Broker Agent” as a “person or entity who recommends clients to digital asset operators in relation to the digital asset business or performs the duties of introducing clients to engage the digital asset operator’s services in relation to the business of digital assets, whether the act of recommending or soliciting customers is for remuneration.” The previous regulations allowed digital asset traders to employ introducing broker agents only if the digital asset trader prohibited those agents from engaging in any of the following activities:
- Granting a monetary amount when using Services or approving account opening applications
- Making recommendations to buy, sell or trade digital assets
- Receiving orders to buy, sell or trade digital assets
- Management or custody of customers’ digital assets.
Additionally, previous regulations required digital asset operators to oversee introducing broker agents to ensure those agents were acting within the above restrictions and only providing accurate information to clients. The remuneration rates for introducing broker agents also had to be clearly defined and disclosed.
The new regulations maintain the previous set of rules, but allow digital asset business operators to use introducing broker agents only in relation to digital token-related services. Under the 2018 Emergency Decree, a “digital token” is distinguished from a “cryptocurrency” in that a digital token denotes an electronic data unit that defines rights to participate in an investment project or rights to receive goods or services. Therefore, a digital token would be either a “security token” or a “utility token” as the terms are used in global ICO jargon. On the other hand, a cryptocurrency is defined as an electronic data unit that functions merely as a medium of exchange. The distinction between a digital token and a cryptocurrency is an important issue that keeps coming up in the Thai regulatory framework.
A comparison of the regulations applicable to cryptocurrency advertising by digital asset operators under the previous regulations (KorThor. 19/2561 and KorThor. 29/2563) and the new regulations (KorThor. 19/2565) can be summarized as follows :
|Previous Regulations||New regulations|
Advertisements that were educational or informative regarding digital assets, investments, services and the distribution of prospectuses for offering digital tokens were exempt from the regulations.
The distribution of prospectuses for offering digital tokens is exempt from regulations.
Advertising that is educational or informative in relation to digital assets, investments and services, or the dissemination of investment research for decision-making purposes by investors that does not solicit or induce the investor to engage the services of a digital asset entrepreneur, may do so not be false, exaggerated, opaque or misleading. However, such ads are otherwise exempt from the overall rules set out in the regulations.
|No restrictions on advertising channel or advertising material.||Any advertisement related to cryptocurrency may only be promoted through an official channel of Digital Asset Business Operator.|
|No obligation to notify the SEC of advertising||Digital asset entrepreneurs must report to the SEC the details of advertising and the cost of such advertising as follows:
· Subsequent notifications in the form of interviews
For all other forms, notice must be given 10 days in advance and may only be written out if the SEC does not respond within the above time limit.
|Advertising content was not allowed to state or guarantee any results from investing in digital assets, unless SEC approval has been obtained, or the content addressed past results or a prediction of future results with appropriate accompanying information and risk factors in a manner that the investor would probably understand.
Promotional content had to include risk warnings related to investments in digital assets and provide a location where more information can be obtained.
Any advertisement for the offering of digital tokens contained in a prospectus prior to the effective date of that prospectus must otherwise have been lawful under the Regulations.
|As with previous regulations.|
|No restrictions on influencers.||The new rules define a “person of significant character” as a person who appears prominently in an advertisement, or whose likeness appears, regardless of the medium, and without whom the advertisement would be considered incomplete. Digital asset entrepreneurs must ensure that persons with a significant role who appear in an ad must disclose the identity of their tenant and their relationship with their tenant in the ad.|
|Digital asset company operators had to monitor their advertising partners to ensure advertising content was compliant with SEC restrictions.||Digital asset company operators must now also supervise their group companies and those who have an interest in their business not to disseminate advertising that could cause confusion among the public.|
Digital asset operators who had existing advertising before the new regulation was enacted have 30 days from September 1, 2022 to comply with the new regulations.