Earlier, the SEC Board passed a resolution approving the proposed amendments to the regulatory framework for utility tokens that are ready to use, ensuring that the regulations align with the characteristics, risks, and usage of each type of utility token. The aim is to provide adequate and appropriate protection for the users without hindering the use of technologies in business and industrial sectors, the development of innovation, and the promotion of the national digital economy policy. Subsequently, the SEC conducted a public hearing to gather comments from the public and stakeholders, with the majority expressing agreement with the principles and the proposed amendments. The SEC has therefore issued notifications concerning the amendments to the regulatory framework for ready-to-use utility tokens, with the key points as follows:  

(1) The regulations of the Initial Coin Offering (ICO) specify that ready-to-use utility tokens that are issued for consumptive purpose or are a digital representation of a certificate (Utility Tokens Group 1), are exempt from the requirement to obtain approval for their offering. Utility tokens that are ready for use and fall outside of Group 1 (Utility Tokens Group 2), which are intended to be listed for trading on a licensed digital asset exchange, must obtain approval for their offering from the SEC and disclose information as required. This includes filing the registration statement and a draft prospectus. Additionally, the offering must also be conducted through an ICO portal approved by the SEC Board;

In any case, all types of utility tokens are subject to the condition that the issuers must not accept the tokens for staking purpose, except the staking for voting, joining the event, or sharing benefits from the ecosystem activities, and must not use them as Means of Payment (MOP) as defined by the Bank of Thailand.

  (2) The regulations of the secondary market stipulate that services related to Utility Tokens Group 1, whether they are ready to use or not, are exempted from obtaining digital asset business licenses. Additionally, digital asset exchanges, digital asset brokers, and digital asset dealers are prohibited from providing services related to such utility tokens*. However, if these business operators wish to provide services related to Utility Tokens Group 1, whether they are ready for use or not, as part of another business operation, they must establish a separate legal entity for this service. Additionally, they must not use any names or information that could mislead the public into believing that they are engaged in a digital asset business under the SEC supervision.

         Additionally, the regulatory framework for digital asset exchanges has been revised to enhance oversight mechanisms and address concerns related to price manipulation in the secondary market. Furthermore, the standards for information disclosure have been raised to better protect digital asset investors.

The notifications concerning the amended regulations have been published in the Government Gazette and have become effective from 13 August 2024 onward. The regulations enhancing the supervision of digital asset exchanges will come into effect 90 to 180 days after the relevant notifications become effective (depending on the specific matters), allowing business operators time to prepare for compliance with the new regulations.  

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Remarks:

* The SEC Board may specify criteria for granting exemption to digital asset exchanges, digital asset brokers and digital asset dealers for provision of certain services related to Utility Tokens Group 1 in the future.  

** The seven relevant notifications are as follows:  

(1) Notification of the Securities and Exchange Commission No. Kor Jor. 16/2567 Re: Exemption of the Provisions regarding Public Offering of Digital Tokens for Certain Types of Digital Token Offerings: https://publish.sec.or.th/nrs/10303s.pdf;  

(2) Notification of the Securities and Exchange Commission No. Kor Jor. 17/2567 Re: Public Offering of Digital Tokens (No. 12) (https://publish.sec.or.th/nrs/10304s.pdf) and Attachment: the Use of Digital Tokens as a Means of Payment for Products and Services and Digital Asset Staking (https://publish.sec.or.th/nrs/10305s.pdf); 

(3) Notification of the Securities and Exchange Commission No. Kor Thor. 18/2567 Re: Determination of Characteristics of Service Provision Not Deemed to Be Operating as Digital Asset Exchange, Digital Asset Broker or Digital Asset Dealer (No. 2) (https://publish.sec.or.th/nrs/10308s.pdf) and Attachment: the Use of Digital Tokens as a Means of Payment for Products and Services, Digital Asset Staking and Digital Tokens for Exchange within a Project (https://publish.sec.or.th/nrs/10309s.pdf);  

  (4) Notification of the Securities and Exchange Commission No. Kor Thor. 19/2567 Re: Determination of Characteristics of Service Provision Not Deemed to Be an Undertaking of Digital Asset Business in the Category of Digital Asset Custodian (No. 3) (https://publish.sec.or.th/nrs/10310s.pdf);   

  (5) Notification of the Securities and Exchange Commission No. Kor Thor. 20/2567 Re: Determination of Characteristics of Providing Advice to the Public Not Deemed to Be an Undertaking of Digital Asset Business in the Category of Digital Asset Advisor (No. 2) (https://publish.sec.or.th/nrs/10311s.pdf);  

(6) Notification of the Securities and Exchange Commission No. Kor Thor. 21/2567 Re: Determination of Characteristics of Fund Management Not Deemed to Be an Undertaking of Digital Asset Business in the Category of Digital Asset Fund Manager (https://publish.sec.or.th/nrs/10313s.pdf); 

  (7) Notification of the Securities and Exchange Commission No. Kor Thor. 22/2567 Re: Rules, Conditions and Procedures for Undertaking Digital Asset Businesses (No. 23) (https://publish.sec.or.th/nrs/10315s.pdf) and Attachment 3: Rules for listing and delisting Digital Assets on Digital Asset Exchange and Disclosure of Information related to Digital Assets traded on Digital Asset Exchange (https://publish.sec.or.th/nrs/10316s.pdf) and Attachment 4: Sign Posting for Digital Assets (https://publish.sec.or.th/nrs/10318s.pdf).