Thai SEC Dismiss Crypto Lending And Borrowing Activity: Details
- Under the new guidelines by the Thai SEC, all the domestic crypto service providers have been banned from crypto lending and borrowing, and they cannot advise the same as well.
- The regulatory authority noted that the crypto lending and borrowing industry is not regulated in Thailand or abroad and, hence, it is imperative to halt such activities due to liquidity pressure created on crypto firms.
Thailand’s Securities and Exchange Commission (SEC), which is responsible for regulating the securities market in the Southeast Asian country, has officially imposed a ban on crypto lending and borrowing activities after a thorough discussion. This means that all the firms that provide crypto-related services in the country won’t be able to provide said services under the new guidelines by the Thai SEC.
The regulatory authority has been very active recently when it comes to the regulation of digital assets and it seems that this new step aims to make the crypto market more securie in the country. Crypto lending and borrowing have been associated with risks due to lack of regulations and difficulty in implementing them.
According to a press release from the Thai SEC, local crypto firms can no longer offer crypto lending and borrowing services and as a result, the rewards associated with such activities and the interest generated through them are also out of the picture. The financial regulator believes that this move will prevent crypto firms from experiencing liquidity issues like the crypto lending firm Celsius Network and as a result, the funds invested by customers will also remain secure.
Thai SEC noted that it is crucial to halt said activities because “there is no supervision both at home and abroad and at present, there are many foreign service providers who are facing liquidity problems and have to stop providing services and suspend withdrawals of digital assets of customers.”
Along with crypto lending firm Celsius halting withdrawals recently due to liquidity issues, another major lending firm Babel Finance also paused all withdrawals of the customers funds which also cited liquidity issues as the reason for the same.
“Due to the current situation, Babel Finance is facing unusual liquidity pressures. We are in close communication with all related parties on the actions we are taking in order to best protect our customers. During this period, redemptions and withdrawals from Babel Finance products will be temporarily suspended, and resumption of normal service be notified separately,”said Babel Finance in a blog post.
Interestingly, there has been a surge in investments from crypto companies in Thailand and as a result, the Thai SEC has been quite active recently. Also, the CEO of crypto platform Zipmex, Eklarp Yimwilai, was accused of non-compliance by by the regulatory authority. The executive was requested to provide details of transactions and wallets used to hold assets of its customers prior to the withdrawal freeze that was announced in July this year which he failed to present clearly.