Regardless of the condition of the crypto market, regulators are still leaving their mark in the industry using their respective power. On March 8, Thailand’s Securities and Exchange Commission (SEC) published an announcement targeting crypto staking and lending services issued by crypto firms.
The announcement has raised questions and speculations among the crypto community on whether the Southeast Asian country is looking to prohibit cryptocurrency staking and lending services on crypto exchanges in its region.
Thailand To Ban Crypto Staking And Lending?
According to the announcement published by the regulator on Wednesday, it is seeking public feedback on a draft regulation concerning the “prohibition of digital asset business operators’” or virtual asset providers’ (VASPs) “provision of or involvement with lending” and staking services in which the authority calls “crypto saving” or “crypto deposit taking.”
Per the SEC’s policy, VASPs are not permitted to provide crypto staking and lending service due to the probability of the firm falling into insolvency.
The Thailand SEC noted:
Digital asset business operators are not allowed to provide or support deposit taking and lending services to prevent possible damage to digital asset investors and the public in the possible event of service discontinuance or financial problems that may occur on a continuous or concurrent basis among service providers as has recently been the case for foreign counterparts.
Additionally, the Thailand SEC further stated that the draft regulation which it wants the public hearing is also expected to clarify the common misconception that the supervision of regulated digital asset businesses is under the same scope as crypto staking and lending services which are currently not supervised at all.
The SEC added:
The proposed regulation aims to provide greater protection to investors, reduce associated risks, and prevent a misunderstanding that deposit-taking and lending services are under the same supervision as regulated digital asset businesses.
Thailand’s SEC Proposes Prohibition Of Staking And Lending
While the Thailand SEC expressed its likely ban on crypto staking and lending services, the regulator further mentioned in the announcement that it had since conducted a public hearing on the principle of the proposed regulation between the month of September and October last year.
The regulator stated the draft regulation would essentially ban digital asset business operators from accepting deposits for staking and lending as well as paying regular interest for depositing digital assets and advertising or persuading of crypto staking and lending services.
So far, the authority has summoned stakeholders and parties interested in taking part in the proposed regulation to submit their comments and suggestions through the SEC’s website or email by April 7, 2023.
Meanwhile, the global crypto market has only continued to plummet as negative news intensifies. The global crypto market capitalization has fallen below the $1 trillion mark with a value of $970 billion at the time of writing, down by nearly 7% in the last 24 hours.
Featured image from Pexels, Chart from TradingView