Canada    FinTech Guide    Chapter 15    Thailand


15. Initial Coin Offerings (ICOs)
Thailand  Thailand

Thailand’s authorities have adopted an accommodative attitude toward token sales from the start, whereby the ICO friendly Security Exchange Commission has publicly acknowledged that ICOs are a viable alternative to traditional methods of funding, where it stresses on the fact that the agency does “realizes the potential of ICO in providing new forms of funding for businesses and startups.” However, Thailand’s delay in providing a clear regulatory framework for ICO has driven many companies to register their ICOs in Singapore which has long been seen as one of the most cryptocurrency friendly countries in the world.



Legal Affairs


Thailand does not currently have any ICO-specific legislations and/or regulations in place. However, it is worth noting that cryptocurrency trading and ICO will soon be regulated with the enactment of ICO-specific legislations, and that all regulatory powers relating to the crypto sector will be given to the Thai Security Exchange Commission (SEC).

Restrictions: At present, only the Bank of Thailand has taken a negative stance against cryptocurrencies by discouraging all financial institutions from conducting or facilitating cryptocurrency related transactions. As it stands, there are no explicit restrictions in place for ICOs or cryptocurrency transactions for the non-banking sector in Thailand, and cryptocurrency exchanges remain possible so long as they are in compliance with the other relevant laws (i.e. applicable Anti-Money Laundering laws and Criminal law).

Token classification: As it stands, unless any digital token offered in an ICO resembles the financial returns, rights and obligations in similar ways to ‘securities’ as defined under the Securities and Exchange Act B.E. 2535, other cleverly structured ICOs will not fall within the scope of supervision of the SEC.

Prospectus: There is no prospectus required, but ICO Issuers, in most cases, will still inform and take directions from the SEC, and submit their white papers and details of the project to minimize the risk of their ICOs being viewed as fraudulent.

AML/KYC: Currently, there are no mandatory AML/KYC requirements that need to be fullfiled in order to perform (i) and (ii) However, it is worth noting that the requirements for underlying assets or services and KYC rules and the standards for information disclosure and transaction reporting, as well as the utilisation of proceeds arising from ICO will soon be made the crucial parts of the imminent ICO regulatory framework, that is expected to be unveiled soon by the SEC in April or May 2018.

Further comments: Since ICOs/tokens/coins are now unregulated, this regulatory uncertainty may soon be resolved, with the recent passing of the 2 new draft legislations that are aimed at comprehensively regulating cryptocurrency transactions and ICOs. The new legislations are expected to be enacted into laws in May or June 2018. The SEC, being the regulator of the crypto industry, is also expected to unveil a comprehensive ICO regulatory framework at around the same time.



Economic Conditions


Thailand remains a cryptocurrency friendly country, with a weekly bitcoin transaction sitting at 48million baht by the end of 2017. As it stands, J Venture Co. Ltd, which operates as a subsidiary of Jay Mart Public Co. Ltd, was the first listed company to offer out its 100 million digital tokens and raised 660 million baht (~USD$21 million). Whereas, a local startup, OmiseGo has also managed to raise $25 million through its ICO in 2017. However, due to the existing legal uncertainty in the country, many companies that intend to launch their ICOs in Thailand are adopting a “wait and see” approach until the regulatory framework for ICO becomes clearer.



Contributing Authors

Tilleke & Gibbins - Thailand

Athistha (Nop) Chitranukroh
Bangkok, Thailand


Piyanuj (Lui) Ratprasatporn
Bangkok, Thailand

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Chapter Index:


1. Payment Services / Mobile Payment

2. Asset and Portfolio Management

3. Consulting and Broking Services / Robo-advisory / Auto-trading

4. Trading Platforms / Social Trading Platforms / Signal Following

5. Crowdfunding / Crowdinvesting / Crowdlending

6. Virtual Currency - Bitcoin

7. Loan Services / Factoring / Loan Broking / Finetrading

8. Online Banking Services

9. Analytics and Research / Data Management / Risk Management

10. Accounting

11. Identification

12. Online-pawning

13. InsurTech

14. RegTech

15. Initial Coin Offerings (ICOs)

Disclaimer:
The information in this guide provides a general overview at the time of publication and is not intended to be a comprehensive review of all legal developments nor should it be taken as opinion or legal advice on the matters covered. It is for general information purposes only and readers should take legal advice from a Multilaw member firm.

Publication Date: 1 May 2018