The Securities and Exchange Commission (SEC) has tightened regulations regarding capital requirements for digital asset operators to ensure they have sufficient funds to support their operations, enhance the market's credibility and flexibility, as well as improve investor protection.
SEC secretary-general Ruenvadee Suwanmongkol said the commission's board of directors approved the revised capital regulations for digital asset operators, including digital asset exchanges, brokers and dealers, to increase investor protection at a meeting on July 7.
Under the revised rules, digital asset operators such as digital exchanges or wallets seeking new licences from the SEC need to have minimum paid-up capital of 100 million baht, up from the current minimum of 50 million baht, while digital brokerages need to have at least 50 million baht, up from 25 million baht, to apply for a licence.
According to the SEC, the new rules also establish a risk-based capital structure to help business operators maintain sufficient funds to support themselves and provide compensation to customers in case of losses. For example, the rules require digital asset business operators to improve the ratio of capital maintenance in both their hot and cold wallets.
Operators are allowed to increase the proportion of customers' assets in hot wallets if the firms hold no more than 1 billion baht of customers' assets.
This move is intended to increase companies' financial flexibility while ensuring they have sufficient funds to protect traders from losses and potential risks.
The new criteria will be effective from the date of publication in the Royal Gazette.
As for currently licensed business operators, the SEC will implement a transitional provision by allowing companies to gradually increase their paid-up capital and improve the ratio of capital maintenance in hot wallets in accordance with the specified rules, within one year from the effective date.
The SEC plans to discuss the revision with representatives of digital asset business operators and other stakeholders in a focus group this month, then conduct a hearing to collect opinions from related parties, interested parties and the public following the talks.
