SEC Thailand Issues Guidance on ICOsbr>
The Securities and Exchange Commission of Thailand (SEC Thailand) has issued a new statement on initial coin offerings (ICO), advising that some digital assets may be subject to securities laws.
The Thai regulator said that since the digital tokens can diverge widely in design and representation, some may resemble financial returns, rights, and obligations in ways similar to securities under the Thailand Securities and Exchange Act.
“The SEC Thailand understands the unique environment in which tech startups operate and realizes that ICO may not yet fit neatly with SEC Thailand’s current regulatory framework,” the agency said. “Therefore, to strike the balance between supporting digital innovation and protecting investors from potential ICO scams, the SEC Thailand is considering appropriate approaches on ICO and welcomes comments and suggestions from the private sector.”
The regulator further cautioned investors saying that they are exposed to heightened risks of price volatility, inadequate liquidity, cyber security, as well as potential fraud and scam, when they deal in ICO investments. Given ICO’s cross-border nature, legal protection and recourse for investors may be limited or not applicable in most cases.
Multiple countries have issued similar warnings to their citizens about the dangers of ICOs, with China instituting an outright ban.