Thailand has restricted crypto custody and lending services.

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In an effort to strengthen investor protection in the digital asset space, Thailand's Securities and Exchange Commission (SEC) has issued new guidelines for firms that provide digital asset services, including the use of customer assets for investment and lending. More disclaimers on the dangers of using crypto on their website. The following risk should be considered as a guideline:

“Cryptocurrencies are high risk. Please study and understand the risks of cryptocurrencies thoroughly as you may lose the entire investment amount.

These regulations prohibit service providers from using customer funds for lending or investment activities, and prohibit “digital asset business operators from providing digital asset custodian services to deposit returns and loans (deposits and loans).”

This measure effectively puts a cap on crypto lending services, restricting platforms from offering any returns on crypto deposited by customers. The SEC's intent with these regulations is to enhance investor protections against risks associated with credit services and is expected to take effect on August 30. The advertisement reads:

“Digital assets are not permitted to be deposited with digital asset deposits or other returns to depositors (e.g., from the company's marketing budget) except in the context of a sales promotion,” the SEC said.

The SEC has acknowledged the need for businesses in the cryptocurrency space to disclose the risks of trading cryptocurrencies by September 2022.

“Prescribing warnings about investment risks in advertising. The style of presentation should be clear and easy to read. It should provide useful information for making complete investment decisions.”

This is not the first law that Thailand has passed, showing how dangerous the use of digital assets is for the Thai government. The Bank of Thailand and the country's SEC have banned crypto payments for goods and services to protect the stability of the financial system and the wider economy.

Trading and holding assets are still allowed, the SEC and the central bank said in a statement: “Since most digital assets are built on decentralized public blockchain technology, there is no regulatory body and no established security standards.” If there is a problem, users may not be protected. Several payment systems […] If consumers use multiple systems, it can cause confusion or cost.

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