Thailand’s Securities and Exchange Commission (SEC) recently approved the launch of the nation’s first spot Bitcoin exchange-traded fund (ETF), marking a significant milestone in the country’s digital asset landscape. One Asset Management (ONEAM) announced the introduction of the “ONE Bitcoin ETF Fund of Funds Unhedged and not for Retail Investors” (ONE-BTCETFOF-UI), targeting wealthy and institutional investors. Scheduled for distribution from May 31 to June 6, the fund will invest in 11 leading global funds with strict adherence to international storage standards and regulatory reviews from the U.S. and Hong Kong.
In the wake of this development, MFC Asset Management is also awaiting SEC approval for its Bitcoin ETF, geared towards affluent investors. ONEAM’s CEO, Pote Harinasuta, highlighted the strategic significance of digital assets in diversifying investment portfolios, citing Bitcoin’s impressive track record of a 124% average annual return over the past 11 years. He recommended a moderate 5% portfolio allocation to Bitcoin, projecting an 8.90% annual return for investors. Harinasuta emphasized the security advantages of investing in Bitcoin through ETFs, which offer custodial storage akin to institutional standards, mitigating risks like data loss and theft.
Thailand’s regulatory framework for the cryptocurrency sector imposes stringent licensing and compliance requirements on digital asset business operators, such as exchanges, brokers, dealers, and initial coin offerings (ICOs). Entities engaging in token sales to the public must secure licenses as “digital asset business operators” to ensure legal compliance and consumer protection. The regulation also extends to ICOs, which necessitate SEC approval and registration through a Digital Portal Service Provider to uphold disclosure and operational standards akin to traditional securities offerings.
Taxation policies related to cryptocurrencies define profits as taxable income under the Revenue Code, with transfers of digital tokens on regulated exchanges enjoying VAT exemption until the end of 2023. The Anti-Money Laundering Act designates digital asset business operators as financial institutions, subjecting them to rigorous reporting and customer due diligence requirements to combat illicit financial flows. Thailand aligns with global trends in digital asset oversight, reflecting a concerted effort to curb unlawful activities within the sector.
Amidst tightening regulations, the SEC in Thailand has taken decisive action against unregistered cryptocurrency service providers to safeguard investors and uphold the financial stability of the country. Close collaboration with the Ministry of Digital Economy and Society aims to identify and block unauthorized platforms, protecting users from potential losses associated with non-compliant operators. The SEC has advised users to withdraw funds from unregistered platforms and utilize the “SEC Check First” application to verify the legitimacy of crypto service providers, with options to report suspicious activities to the Complaint and Whistleblower Center for further investigation.
The global trend towards stricter oversight of digital asset markets is evident in regions like Europe and South Korea, where regulatory frameworks are evolving to address the complexities of decentralized finance and virtual asset service providers. The Markets in Crypto-Assets Regulation in Europe seeks to assess the impact of decentralized finance, with directives forthcoming from the European Commission. In South Korea, the FSC is set to enhance regulations surrounding VASPs, emphasizing the accountability of executives within these entities and granting expanded authority to oversee personnel matters and suspend licenses during investigations.
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