Mule Accounts Threaten Thai Market as SEC Fights Complex Web of Investment Fraud

 

Securities regulator admits limited powers to prosecute general fraud or money laundering but confirms crackdown on digital asset mules and finfluencers.

 

The proliferation of mule accounts and sophisticated investment scams poses a continuous and growing threat to the Thai capital market, especially when listed companies (PLCs) are implicated. 

 

This complex entanglement challenges regulators due to rigid laws governing which agency holds jurisdiction.

 

Anek Yooyuen, Deputy Secretary-General and Spokesperson for the Securities and Exchange Commission (SEC), highlighted the complexity, noting that criminal operations primarily thrive on social media platforms like Facebook and TikTok, luring victims with promises of high returns and immediate investment pressure.

 

The "secret weapon" enabling these crimes is the mule account, which acts as the crucial tool for receiving and rapidly transferring illegal funds.

 

While public expectation often falls upon the SEC to intervene when PLCs are linked to scammers, the agency faces strict legal limitations.

 

Anek explained that general mule account usage and fraud fall primarily under the Royal Decree on Mule Accounts and the Royal Decree on Preventing and Suppressing Cyber Crime.

 

"The SEC can only inspect and act when there is suspicion of an offence under the Securities and Exchange Act," Anek stated. "If the act does not directly violate securities law, such as general fraud or renting space for illegal activity, the SEC has no authority to investigate, as this would be considered an overreach."

 

 

Direct offenses under the Securities Act that do trigger SEC action include the use of nominees to evade rules or the failure to report the acquisition of a stake in a PLC exceeding five per cent. 

Furthermore, if illicit funds—or 'grey money'—are used to purchase shares, the matter falls under Money Laundering Law, the direct responsibility of the Anti-Money Laundering Office (AMLO), not the SEC.

Although general fraud may fall outside the SEC's direct remit, involvement by a listed company carries severe consequences:

Reputation Damage: Any link to illegal activity causes significant damage to a company’s reputation.

Accessory Liability: Proving a company is legally liable as an accessory—for instance, if it unknowingly rents office space to a scam centre—is difficult unless authorities can prove the company was complicit or directly supported the criminal intent.

 

Despite the legal fragmentation, the SEC is leading a fierce campaign against digital asset-related fraud:

Tighter Licensing: The agency has stiffened licensing criteria for Digital Asset Operators, increasing requirements for capital, security systems, and disclosure to filter out fraudulent entities at the outset.

 

Enhanced AML/KYC: Customer identity verification and transaction tracking (AML/CFT) have been upgraded to ensure Thai platforms are not exploited for money laundering or fraudulent coin transfers.

 

Multi-Agency Cooperation: The SEC has forged memorandums of understanding (MOUs) with the Bank of Thailand (BOT), AMLO, the Ministry of Digital Economy and Society (DES), and the police to "close the loop of fraud" from fake accounts and websites to asset transfer.

 

Public Alerts: An Investor Alert Portal publishes suspicious accounts, tokens, and platforms for public verification before investment.

 

Finfluencer Regulation: Guidelines have been issued requiring digital asset reviewers and influencers to transparently disclose any financial benefits to curb the promotion of fraudulent schemes.

 

The scale of the problem is evident: the SEC confirmed that digital asset businesses suspended 32,000 digital asset mule accounts between the start of the year and 30 September 2025.

 

The agency stressed that while it must operate within its legal bounds, it will immediately investigate any violations of securities law to protect market confidence.