The Securities and Exchange Commission (SEC) in Thailand has moved to ban local cryptocurrency firms from providing staking and lending services to their customers. The prohibition aims to protect traders and their customers from the inherent risks of such activities.
According to a press release the Thai SEC has banned domestic crypto entities from providing lending and staking services to clients as the country moves to regulate the digital scene move actively. The authority has said the ban was issued as a means “to protect traders and the general public from the risks of such transaction providers.” The regulator said enforcing such a ban is key given that many foreign companies have been experiencing liquidity issues in the past couple of months. Perhaps the greatest example of this is one of the largest crypto lenders and DeFi platforms – Celsius Network. The firm halted customer withdrawals, swaps, and transfers between accounts in June citing harsh market conditions. Merely a month later, the company filed for Chapter 11 bankruptcy protection with the Southern District of New York.
Another crypto lender, Babel Finance, lost around $280 million and subsequently suspended customer withdrawals amidst rising liquidity issues. The events had a knock-on effect as Zipmex, one of Asia Pacific’s most prominent digital asset exchange platforms operating in Singapore, Thailand, Indonesia, and Australia, was forced to freeze withdrawals due to financial difficulties tied to Babel Finance. Zipmex has since resumed withdrawals. In the wake of the collapse of multiple crypto firms, the SEC made the decision to prohibit digital business operations whilst at the same time restricting the advertising of cryptocurrencies.
The SEC recently tightened the rules of cryptocurrency advertisement in an effort to protect retail investors in the wake of the massive selloffs in the digital asset market. The regulator outlined that advertisements for virtual tokens must include clear and visible warnings about the risks of investing in cryptocurrencies.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.