Bangkok Post reported that the Securities and Exchange Commission (SEC) and the Thai Stock Exchange (SET) are discussing a comprehensive regulatory framework that will cover fundraising through initial offers of currencies.
It is expected that a public hearing will be held in the near future. Once completed, the new set of rules will be presented to the Board of Directors of the Commission for consideration.
The current guidelines limit the maximum investment for retail investors to 10,000 USD per ICO and 95,000 USD per person. Using additional information gathered from market participants, the SEC's Board of Directors will finalize the regulatory framework for symbolic sales and related financial transactions. The matter is expected to rise with the board in the first quarter of this year.
"The problem of ICOs requires a coherent national policy because it is a major problem"
This was stated by the Secretary General of the SEC, Rapee Sucharitakul, and noted that the rapid growth of ICO's fundraising in many countries is the main reason for Thailand's decision to address the issue at the level of regulatory policies. The sales of tokens will be discussed when the SEC Board of Directors is reconvened.
If ICOs are not regulated, investors and other participants may question their legitimacy, Rapee warned in other comments about the need for regulatory support for this type of investment.
The Thai official highlighted the growing popularity of initial offers of currencies with investors and new companies in the technology sector. In their own words, ICOs are fashionable because they can raise funds quickly without requiring a financial statement.
One of those firms plans to carry out an ICO in March. The Jaymart subsidiary, J Ventures, will become the first company listed on SET to sell its own digital currency, and will launch "JFin" through a symbolic sale.
The funds raised will be used to develop a decentralized digital lending platform integrated with Blockchain technology. J Ventures expects to raise more than 21 million dollars in local currency in the first phase of the offer. The tokens will be priced at 6.40 baht each (0.20 USD) and a total of 100 million coins will be offered through the ICO.
Initial concerns aside
The announcement by the SEC represents a slight change in the regulator's generally positive attitude towards initial offers of currencies. The previous comments of their representatives suggested some reservations, but it seems that the initial concerns have been left aside.
The Assistant Secretary-General, Praoporn Senanarong, had previously stated that the new method of fundraising involved "a long-term disturbing risk for traditional financiers".
At the time of its declaration, the regulation of the ICO had been promised for the second quarter of next year. Praoporn also shared the concern that symbolic sales could replace initial public offerings in the long term.
In his words, that would interrupt the traditional operations of asset management firms, investment banking, investment advisory services, exchanges and intermediaries.
Seeking to adopt a "balanced policy with respect to ICOs," the SEC last year expressed its desire to "find a balance between supporting digital innovation and protecting investors from potential scams through ICO."
The regulator warned that ICOs could be used as a tool for fraud, but also noted the potential of currency offers to meet the financing needs of new companies. Earlier this month, Thai regulators allowed the trading of Bitcoin futures.
Under the new ICO regulations, companies will be able to raise up to 20 million baht (around USD 640,000) per project from retail investors. The total amount of fundraising is capped at 40 million baht (approximately 1.3 million dollars).
The Securities and Exchange Commission also intends to implement evaluation procedures for ICO projects through a portal. Companies should disclose the white paper that details the objectives of the project, their business plans and models, the intended use of the revenues, the associated legal risks, the management information and advice, and the details of the tokens.