The Securities and Exchange Commission, Thailand (SEC Thailand) has published its viewpoint on initial coin offerings (ICOs) which have quickly gained popularity as a convenient way of raising funds by tech companies.
The agency noted that in some cases ICO may be used as a tool for fraud or scam. In addition, the SEC Thailand also said if an ICO constitutes offering of securities, the issuer will need to comply with applicable regulatory requirements under its purview. It added:
“Since the digital tokens can diverge widely in design and representation, some may resemble financial returns, rights and obligations in similar ways to securities under the Securities and Exchange Act.
“The SEC Thailand understands the unique environment in which tech startups operate and realizes that ICO may not yet fit neatly with SEC Thailand’s current regulatory framework. Therefore, to strike the balance between supporting digital innovation and protecting investors from potential ICO scams, the SEC Thailand is considering appropriate approaches on ICO and welcomes comments and suggestions from the private sector.”
In the past couple of weeks, the US SEC, the Canadian Securities Administrators (CSA), the Monetary Authority of Singapore (MAS), and Hong Kong’s Securities and Futures Commission (SFC) have also issued guidance on how ICO tokens may be subject to securities laws.
The SEC Thailand further cautioned investors saying that they are exposed to heightened risks of price volatility, inadequate liquidity, cyber security, as well as potential fraud and scam, when they deal in ICO related investments. It said:
“Given ICO’s cross-border nature, legal protection and recourse for investors may be limited or not applicable in most cases.”
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