Thailand announces ban on crypto payments, scrutinizes local exchanges

The SEC or Thailand Securities and Exchange Commission has banned the usage of crypto coins as a payment method in order to hammer out a better and regulated cryptocurrency market for the general public. At the same time, the Thai SEC has proposed a new law that requires the cryptocurrency business platforms, including brokers, exchange platforms and dealers, to disclose the quality of service they provide to the users and the IT usage information.

After further discussion with the Bank of Thailand (BOT), SEC has made it clear through an announcement that businesses in all the regions are banned from accepting crypto coins as payments from April 2022. Joint research conducted by both Bank of Thailand and the Securities and Exchange Commission has deduced that accepting cryptocurrency as payment can directly impact the overall stability of the financial system, and it also risks the overall economic system of the country, including the businesses and its people.

SEC also has highlighted some risks that include loss of value due to price volatility, personal data leakage, money laundering and cyber theft. After the implementation of the new law, the companies and businesses will be barred from the advertisement of acceptance of crypto coins and the available tools, established systems and wallets that can encourage crypto payments.

During the ban period, if any business or company conducts transactions using cryptocurrency and noncompliance with the new crypto laws and regulations will result in legal action against the company with the chances of permanent cancellation or temporary suspension of their service. Nevertheless, the SEC, BOT and other government agencies have fully recognized the technology behind these digital assets like blockchain, and they also support and give value to the usage of this technology for more development.

Furthermore, according to this proposal, the SEC has set its focus on securing the investor’s money by measuring the quality of services provided by the crypto companies and businesses. After going through a rough translation, SEC demands that the digital asset operators will arrange and hand over system capacity utilization and service quality reports on a monthly basis, and the reports should be submitted to the SEC office within the first five days of every month. Moreover, the companies and businesses will also need to disclose their service information and reports on their official company websites following a similar timeline.

The Thailand government right now is in the process of creating a regulatory framework for crypto businesses that will define the red areas of the country’s crypto industry. With the help of a graph, SEC has highlighted the number of complaints received against the crypto companies in the past twelve months, which are related to poor service conditions, system failures and shopping related problems. According to the published data, the native users and investors in the country have mostly faced issues related to shopping, and this might be one of the reasons that have triggered the SEC to take the necessary steps and impose a ban on the crypto transactions in the country.

During the initial week of March, the Thailand Ministry of Finance softened the crypto tax regulations with an aim to promote the usage and investment of digital currencies and virtual assets. The new tax policy had exempted the crypto traders from the 7 percent value-added tax (VAT) while trading is conducted on authorized exchange platforms. The Thai revised tax policy also allowed the traders to counterbalance their yearly losses against the profits from digital assets across all digital asset platforms. 

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