After the Zipmex implosion, Thailand’s regulators have apparently had enough and are looking to revamp the laws that regulate the country’s cryptocurrency industry.
Arkhom Termpittayapaisith, Thailand’s Finance Minister, revealed the government’s plans to review the laws in charge of the country’s digital asset ecosystem. The plan involves granting greater powers to the country’s central bank.
Currently, the Securities and Exchange Commission (SEC) is the main institution in charge of overseeing the industry, but a proposed amendment will see the central bank take the lead.
“Right now, the central bank has no room to enter the regulatory framework, except to notify that cryptocurrencies are not a legal means of payment for goods and services,” Arkhom said. “So the framework is not clear enough to regulate the industry.”
Sethaput Suthiwartnarueput, governor of the Bank of Thailand, expressed optimism about the change, saying the regulator will draw “red lines” on cryptocurrencies as it moves towards launching a central bank digital currency (CBDC).
Thailand has divided opinions on cryptocurrencies
The country’s overall stance towards cryptocurrencies has been inconsistent, with a blanket ban on the asset class being proposed at one stage.
Several factors were responsible for the decision to bring in the Bank of Thailand as the lead regulator. The chilling crypto winter in which traders lost over $2 trillion was one of the factors.
Another factor was the fall of lenders like Celsius and the bankruptcy of entities like Three Arrows Capital. Maters climaxed when Zipmex, a local cryptocurrency exchange, suspended withdrawals for its clients, leaving thousands of investors stranded.
“We are trying to protect investors and keep industry players on fair terms,” Arkhom said. He cited the example of the stock market having a high level of investment protection, while digital assets have negligible protections “except for the consent that [investors] put at the bottom.”
Investors are already scared
Recent events in the markets have negatively affected cryptocurrency traders from Thailand. Bloomberg reported that the number of active business accounts dropped from 700,000 to 230,000 in less than six months.
Across the divide, digital asset companies are also showing signs of desperation to appear profitable. In June, the SEC fined Bitkub, a local exchange, for formulating “artificial trading volumes” as trading volumes plummeted across the board.
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