Thailand’s Security and Exchange Commission is finalizing preparations to ban crypto service providers from providing lending and staking services to crypto users in the country. According to local media in the country, the financial regulator is starting to clamp down on crypto asset service providers on the back of the collapse of crypto lending firms that has been experienced this year.
Collapsing DeFi Platforms
Many financial regulators have given signals that a lot of decentralized finance firms are currently on the edge of collapse.
Due to the reports, the Thai SEC decided to take preemptive measures in order to ensure the protection of crypto investors and at the same time, to reduce the risk to the public while they interact with the crypto sector. The SEC stated that the crypto market and its technology puts users at risk because the absence of well-defined regulations usually covers fraud, unverifiable valuations claims, rapid speculation, and crime.
The Thai Commission has proposed to ban businesses in the crypto space from receiving crypto asset deposits from users and later using the same crypto assets as loans and investment items that would be used to pay depositors. It equally proposed to ban the advertisement of crypto or any means of soliciting people to take any action towards depositing or borrowing crypto. Effectively stopping operators of crypto businesses from taking in crypto as deposits or giving interest on it.
More Regulations for Better Security
Before the crisis of the collapse of DeFi platforms, the available data shown by most players in the sector revealed that lending was moving toward dependence on crypto assets to boost business activities instead of having them for betting over the short term alone. Precisely, a lot of interest came from institutional investors who wanted to borrow so they could facilitate certain plans such as arbitrage, shorting, and working capital.
According to reports, Thailand released a set of new crypto regulations recently for businesses in the space. Some of the regulations were restrictive and they have sparked widespread outrage from the public. In recent times, the country also suggested new rules that were designed to govern the custody of crypto assets in the care of operators.
The latest crypto rules in view need crypto exchanges to share certain information about users with the regulatory body. This will happen when funds are moved from one firm to another, in order to curb the increasing number and spate of criminal activities taking advantage of the crypto market.
In the early days of 2021, crypto investment and asset managers were asked to get a license before they could keep operating.