Thailand’s financial market regulator has said a new rule to govern initial coin offerings (ICO) in the country will take effect on July 16.
The Thailand Securities and Exchange Commission (SEC) issued an announcement on Wednesday which states the new rule will be enacted later this month, making Thailand one of the first countries to allow ICOs in a regulated environment.
The SEC said under the new regulatory framework any entity that wishes to conduct an ICO must file an application for approval with the regulator before starting a token sale.
But instead of directly screening applications from individual ICO projects, the SEC will first evaluate filings submitted by those what it calls “ICO portals,” which are online marketplaces where potential ICO organizers can operate their token sales.
The SEC said those approved ICO portals will be responsible for screening ICO projects, after which the applications of those selected projects by ICO portals will then be accessed by the SEC for a final decision.
As previously reported by CoinDesk, the new law is a result of a months-long process that saw public hearings and legislative debates regarding how to regulate cryptocurrency and ICOs in the country. A royal decree on the matter was initially announced in May before it was finalized to take effect this month.
The SEC said ICO portal applicants must have registered businesses in Thailand with a minimum registered capital of 5 million baht, or $150,000. ICO portals must have adequate resources to evaluate an ICO issuer’s business plan, project structure, technical capacity, and source code, etc.
Individual ICO projects must also have a legal business registration in Thailand, the SEC said. And, while ICOs can be offered to retail and institutional investors as well as high net worth individuals, the law also puts a 300,000 baht (or $9,000) hard cap on contributions by individual retail investors for each project.
In addition, the SEC said only Thai baht and seven cryptocurrencies can be accepted in a token sale, including bitcoin, bitcoin cash, ethereum, ethereum classic, litecoin, ripple, and stellar.
Stepping back, the regulator also warned the public that an ICO license does not necessarily warrant the success of a token project. Rapee Sucharitakul, the SEC’s Secretary General said in the announcement:
“Being licensed to offer digital tokens from the SEC does not guarantee the success of a fundraising project. The price or return could be negative. … Investors should study the information thoroughly and be sure they can accept the risk involved before investing.”
Thai baht image via Shutterstock