After Zipmex’s implosion, regulators in Thailand have seemingly had enough and are looking to revamp the laws regulating the country’s cryptocurrency industry.
Arkhom Termpittayapaisith, Thailand’s Finance Minister, disclosed the government’s plans to overhaul the laws in charge of the country’s digital asset ecosystem. The plan involves giving 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 instead.
“Right now, the central bank has no room to enter into the regulatory framework except for notifying that cryptos are not a legal means of payment for goods and services,” said Arkhom. “So the framework is not clear enough to regulate the industry.”
Sethaput Suthiwartnarueput, Bank of Thailand Governor, expressed optimism over the change, saying that the regulator will draw “red lines” on cryptocurrencies as it inches toward a central bank digital currency (CBDC) launch.
Thailand has divided opinions on crypto
The country’s general 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 the Bank of Thailand on board as a core regulator. The chilling crypto winter that saw traders lose over $2 trillion was one of the factors.
Another factor was the fall of lenders like Celsius and the failure of entities like Three Arrows Capital. Maters reached a climax when Zipmex, a local crypto exchange, suspended withdrawals for its clients, leaving thousands of investors stranded.
“We are trying to protect investors as well as keeping the players in the industry on fair terms,” said Arkhom. He cited the example of the stock exchange as 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
The recent events in the markets have adversely affected Thailand’s crypto traders. Bloomberg reported that the number of active trading accounts fell from 700,000 to 230,000 in less than six months.
On the other side of the divide, digital asset firms are also showing signs of desperation to appear profitable. In June, the SEC fined Bitkub, a local exchange for formulating “artificial trading volumes” as transaction volumes tanked across the board.