Integrity Legal

In recent weeks, certain sectors of the internet as well as the administration of this blog have been attempting to predict the trajectory of the issues surrounding both cryptocurrency regulation (and the exchanges associated therewith) as well as the more specific issue of regulatory oversight with respect to Initial Coin Offerings or ICOs in Thailand. As of the time of this writing, specific provisions of either an enacted or proposed regulatory framework remain to be seen. However, according to a recent article in the Bangkok Post entitled SET Drafts Advice for ICO Investment some regulatory agencies are issuing guidelines for the public regarding Initial Coin Offerings as well as cryptocurrency generally. To quote directly from the aforementioned article:

The Stock Exchange of Thailand is preparing guidelines for investment in initial coin offerings so that investors can evaluate ICOs and assess risk and return…ICO transactions are similar to crowdfunding, whereby the issuer presents a business model to investors, but the key differences are that the raised funds are in the form of digital currencies using blockchain technology and the deals are enforced using smart contracts.

In the past there were apparently discussions among Thai officials with regard to the regulation of digital currency as well as the mechanism of promulgating such instruments through usage of ICO mechanisms. At present, relevant regulators have yet to produce a framework under which creation of new digital currency will be regulated in Thailand. Furthermore, the creation of so-called “smart contracts” have yet to be substantively addressed in either a regulatory context or through any type of judicial opinion. In short: the technology is quite cutting edge and, as in most cases regarding the law and technology, the legal system and regulators are playing a sort of game akin to “catch up”. To Thai regulators’ credit: this issue is one that has only come to the foreground quite recently and it involves technology and practices that relatively few are well versed in dealing with. Therefore, some amount of delay is not unreasonable. In fact, it may be necessary in order to ultimately promulgate a lasting regulatory framework.

As of the time of this writing some developments have occurred with respect to digital currency and the exchanges associated therewith. Most notably, the Bank of Thailand recently requested that certain banks refrain from facilitating banking functions associated with digital currency exchange. In connection with this news there has been speculation that any future regulations will contain requirements such as “Know Your Customer” rules requiring exchanges to be fully apprised of their customer’s identity’s (and perhaps business endeavors?) although a detailed copy of any regulations remain to be seen. As matters pertaining to digital currency continue to remain opaque from a legal standpoint in Thailand, the administration of this blog will continue to provide updates on the matter as and when necessary in an effort to provide up to date information regarding what has proven to be both a dynamic and legally nettlesome issue.

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