SEC cracks down on crypto companies for making false promises
The Securities and Exchange Commission (SEC) has said it is tightening controls on cryptocurrency companies to protect retail investors and bring Thailand’s crypto trading standards up to international levels.
In a statement on Thursday, SEC said some crypto trading advertisements did not include a warning on the currency’s high volatility. SEC said most promotions only highlighted positive information, with the warning printed in a font that is too small to read.
“These advertisements can lure people into investing without considering the risks and conditions, which could result in damages to the investors,” SEC said.
The companies have 30 days to comply with the new rules, which include:
• Advertisements cannot feature false, misleading or exaggerated claims. Firms can only advertise the number of customers who have actually opened an account and are using the services.
• Operators must provide SEC with details of advertising spending and the use of influencers and bloggers as per SEC’s terms, conditions and timeframe.
• Warnings should be clear and easy to read, while advertisements must feature balanced views providing information on both positive and negative factors.
• Crypto companies must limit their advertisements to official channels such as their website to prevent impulse buying. Other services, however, can still be advertised via other channels.
SEC has also barred cryptocurrency operators from having an “introducing broker agent” or IBA, a licensed agent who advises customers on investments in exchange for a fee. Operators of digital tokens, however, are allowed to have an IBA.
The commission has been cracking down since the crypto industry came under greater scrutiny. On Wednesday, it imposed a 1.92 million baht fine on digital asset trader Zipmex Thailand Co Ltd for suspending digital asset trading and stopping investors from depositing or withdrawing from the company’s crypto wallets in late July.
On Tuesday, Samret Wajanasathian, chief technology officer of crypto exchange company Bitkub, was fined 8.53 million baht for insider trading. He was also barred from holding an executive position for 12 months.
Last week, Siam Commercial Bank backed out of a 17.85 billion baht deal to buy the majority share of Bitkub, citing unresolved issues with the securities regulator.
