Thailand’s securities regulator believes that crypto firms should not be allowed to deploy users’ deposits and provide lending services.
Thailand’s Securities and Exchange Commission (SEC) is preparing to hold a new public hearing on a potential ban on staking and lending services in the country.
Thailand’s SEC officially announced on March 8 that the authority is seeking public comments on a draft regulation prohibiting virtual asset service providers (VASPs) from providing or getting involved in any type of crypto staking and lending transactions.
According to the SEC’s policy, VASPs should not be allowed to deploy users’ deposits and provide lending services in order to prevent possible damage to investors in a possible event of services’ termination. Additionally, the draft regulation is expected to further clarify the scope of supervision of digital asset businesses because they are currently not fully supervised, the SEC stated, adding:
“The proposed regulation aims to provide greater protection to investors, reduce associated risks, and prevent a misunderstanding that deposit taking and lending services are under the same supervision as regulated digital asset businesses.”
In the announcement, the securities regulator mentioned that the SEC conducted a public hearing on the principle of the proposed regulation in September and October 2022. The draft regulation would essentially prohibit VASPs from operations like accepting user deposits for lending, staking and any further deployment of such assets, offering interest payouts on crypto holdings, as well as advertising any of such services.
The authority has invited stakeholders and interested parties to submit their feedback and suggestions via the SEC’s website or email by April 7, 2023.
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The news comes amid the SEC of Thailand beefing up the country’s cryptocurrency rules in response to the ongoing crisis in the crypto lending industry.
A wide number of major industry lenders — including Voyager Digital, Celsius Network, Genesis Global, Babel Finance and Hodlnaut — have encountered serious liquidity issues amid the ongoing crypto bear market, pushing some firms to either restructure or liquidate their business. Gemini, a major crypto exchange founded by Tyler and Cameron Winklevoss, is facing a lawsuit from the United States’ SEC for alleged violations in its “Earn” program, designed to offer investors up to 8.05% in annual gains.