Thai SEC Unveils New Regulations to Allow Mutual and Private Funds to Invest in Digital Assets

The Thai Securities and Exchange Commission (SEC) has announced new regulations. These rules will allow mutual and private funds to invest in digital assets. This move aims to meet the growing interest from institutional investors and align with international trends.

A draft proposal was published on Wednesday. It invites public feedback on changes to the criteria for funds investing in digital assets.

The SEC wants to enable securities firms and asset management companies to offer services to large investors. This includes options for diversifying into cryptocurrency products, like exchange-traded funds (ETFs). The goal is to keep pace with global developments in digital assets and create more opportunities for investors.

This initiative comes in response to increased international interest in Bitcoin and Ethereum ETFs, which received trading approval in January and May.

While Thai investors can access crypto ETFs abroad, the current mutual fund framework, established in 2015, hasn’t adapted to changes in digital asset investing.

The SEC stated, “The SEC Office sees fit to adjust the criteria for accepting investment in digital assets to be consistent with international development.”

The proposed rules will distinguish between high-risk assets, like Bitcoin, and stablecoins, such as Tether, which are designed to maintain a stable value.

Additionally, the SEC emphasized the importance of fund managers fulfilling their fiduciary duties. They must select suitable investment channels and manage risks effectively.

The draft sets limits on digital asset exposure for different fund types. Retail mutual funds will be restricted to a 15% allocation in crypto investments. In contrast, more sophisticated funds for institutional and ultra-high-net-worth investors will have no cap on exposure, although they must diversify to manage risk.

The SEC's proposal also includes guidelines for temporarily holding assets like Bitcoin or Ethereum. The holding period for trading purposes will be capped at five business days. The SEC noted, “Funds may need to hold crypto assets to buy, sell, or exchange digital assets.”

Public comments on this proposal will be accepted until November 8. Final regulations are expected next year.

In other news, federal authorities charged 14 individuals and four crypto companies with market manipulation and “wash trading” in the digital asset sector. This marks a first-of-its-kind case. The U.S. Department of Justice (DOJ) reported that over $25 million in cryptocurrency has been seized. Authorities even created a fake digital token to catch alleged manipulators. Charges were filed against Gotbit, ZM Quant, CLS Global, and MyTrade.

FTX has requested court approval for a settlement that requires former Alameda Research CEO Caroline Ellison to transfer nearly all her assets to FTX creditors. The motion, submitted on October 7, seeks authorization for this settlement. It states that Ellison agrees to transfer any assets not forfeited to the government in her criminal case or used for legal expenses. The document notes that once the terms are met, “Ellison will have no remaining assets other than certain physical personal property.”

In Ireland, the Criminal Assets Bureau (CAB) holds Bitcoin seized from a drug dealer in 2019. They are currently unable to access it, even though its value has soared to €345 million ($378 million). The Bitcoin was worth around $56 million when it was seized from Clifton Collins in 2020. This followed a ruling from Ireland’s High Court that it was obtained through criminal activity. Collins was ordered to hand over the Bitcoin to the CAB under the Proceeds of Crime legislation after police uncovered a cannabis growing operation.