A Complete Guide to theRegulations on
Cryptocurrency and Digital
Token Offering in Thailand
2023 Edition(The law as of 29 August 2023)

Digital assets in Thailand

In 2022 and 2023, following the collapse of the key global players in the crypto industry, regulators aroundthe world closely scrutinized crypto activities and tightened the regulations for digital asset businesses. This
tightening primarily concerns the protection and segregation of customers' assets, which has become
standard practice since the crypto crash.
Over the past year, we have witnessed a series of enforcement actions and attempts by offshore regulators
to classify various types of digital asset products and determine whether these products should be classified
as securities.
Building upon the aforementioned trends in the digital asset industry, the Office of the Securities andExchange Commission (SEC) issued new regulations and held public hearings. These initiatives aim toenhance investor protection and strike a balance between supervising and fostering the development of thecrypto industry.
To keep up with the dynamic and evolving regulatory developments, we have revised this publication toprovide an updated overview of regulations pertaining to digital assets in Thailand.

Non-reliance and exclusion: All Content is for informational purposes only and may not reflect the most current legal and regulatory
developments. All summaries of the laws, regulations and practice are subject to change. The Content is not offered as legal or
professional advice for any specific matter. It is not intended to be a substitute for reference to (and compliance with) the detailed
provisions of applicable laws, rules, regulations or forms. Legal advice should always be sought before taking any action or refraining
from taking any action based on any Content. Baker McKenzie and the editors and the contributing authors do not guarantee theaccuracy of the Content and expressly disclaim any and all liability to any person in respect of the consequences of anything done or
permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the Content. The Content may
contain links to external websites and external websites may link to the Content. Baker McKenzie is not responsible for the content oroperation of any such external sites and disclaims all liability, howsoever occurring, in respect of the content or operation of any suchexternal websites.

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A Complete Guide to the Regulations on Cryptocurrency and Digital Token Offering in Thailand

Table of contents
Part I. Applicable laws .................................................................................................................... 1
Part II. Digital assets law ................................................................................................................ 2
1.
2.

How can we differentiate between cryptocurrencies and digital tokens, and how are they regulated? .... 3
Overview of the regulatory regime on the offering of digital tokens and operation of a digital asset
business..................................................................................................................................................... 4
2.1

2.2

Offering of digital tokens to the public ............................................................................................. 5
A.

Digital token offering .............................................................................................................. 5

B.

Proposed rules on ready-to-use utility tokens ........................................................................ 5

C.

Exempt offering: limited offering ............................................................................................ 6

D.

Real estate digital token offering............................................................................................ 6E.

Proposed rules on debt-like and infra-backed tokens ........................................................... 8

F.

Relevant parties ..................................................................................................................... 8

Operation of a digital asset business .............................................................................................. 9
A.

B.

3.

▪

Digital asset exchange .................................................................................................... 9▪

Digital asset broker .......................................................................................................... 9▪

Digital asset dealer .......................................................................................................... 9▪

Digital asset fund manager .............................................................................................. 9▪

Digital asset advisor ........................................................................................................ 9▪

Digital asset custodial wallet provider ............................................................................. 9

Exempt activities .................................................................................................................. 10

Guideline for various types of market participants .................................................................................. 11
3.1

3.2

iii

Regulated activities ................................................................................................................ 9

Guideline for entities planning to issue digital tokens ................................................................... 11A.

Issuer ................................................................................................................................... 11

B.

Digital token ......................................................................................................................... 11C.

Registration statement and prospectus ............................................................................... 12

D.

Offering process ................................................................................................................... 12E.

Timeline................................................................................................................................ 13F.

Offering period ..................................................................................................................... 13G.

Fees ..................................................................................................................................... 13

Guideline for entities planning to operate as an ICO portal .......................................................... 14A.

Portal .................................................................................................................................... 14

B.

Timeline................................................................................................................................ 15C.

Fees ..................................................................................................................................... 15

3.3

Guideline for investors ................................................................................................................... 15

3.4

Guideline for entities planning to operate digital asset businesses .............................................. 16
A.

Digital asset exchange, broker, dealer ................................................................................ 16

B.

Digital asset advisor, fund manager, and custodial wallet provider ..................................... 17

C.

Timeline................................................................................................................................ 18

A Complete Guide to the Regulations on Cryptocurrency and Digital Token Offering in Thailand

D.

3.5

Ongoing requirements for digital asset businesses ............................................................. 19▪

Custody of customers' assets........................................................................................ 19▪

Operation of other businesses ...................................................................................... 19▪

Outsourcing ................................................................................................................... 19▪

Listing rules ................................................................................................................... 20▪

Restriction on payment by digital assets ....................................................................... 20▪

Restriction on deposit taking and lending services ....................................................... 20▪

Advertisements .............................................................................................................. 20▪

IT standards ................................................................................................................... 21▪

Wallet management and key management ................................................................... 21

Guideline for entities planning to issue NFTs or operate an NFT marketplace ............................ 21

Part III. Anti-money laundering regulations ................................................................................... 22
1.

On-boarding process ............................................................................................................................... 22

2.

Ongoing compliance requirements .......................................................................................................... 23

Part IV: Baker McKenzie Bangkok – FinTech and digital asset expertise...................................... 24iv

A Complete Guide to the Regulations on Cryptocurrency and Digital Token Offering in Thailand

Part I. Applicable laws
The starting point for understanding digital asset regulations in Thailand is the Emergency Decree on Digital
Asset Businesses, B.E. 2561 (2018) (the "Digital Asset Decree"), which specifies a new asset class(digital assets) to be regulated under Thai law. From its effective date (14 May 2018), any business operator
who wishes to conduct any activity regarding digital assets must take this law into account.
To determine whether the digital instrument you are planning to issue would fall under the definition of digitalassets, you must consider the Digital Asset Decree and other existing laws, including the Securities
and Exchange Act, the Payment Systems Act, and the Derivatives Act.
Certain types of instruments or assets that utilize innovative technology or digital elements, such as
securities under the Securities and Exchange Act, e-money under the Payment Systems Act, and option
instruments under the Derivatives Act, are regulated under other specific laws and regulations, not the
Digital Asset Decree.
To illustrate, digital securities are to be regulated under the purview of the Securities and Exchange Act, andnot the Digital Asset Decree, because their core characteristics fall under the definition of what constitutes"securities".
Some types of instruments or assets that did not fall under the scope of existing laws before 14 May 2018
might now be regulated under the Digital Asset Decree if they have specific characteristics that fall within thedefinition of "digital assets" as prescribed in the Digital Asset Decree.

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A Complete Guide to the Regulations on Cryptocurrency and Digital Token Offering in Thailand

Part II. Digital assets law
The following is an overview of how digital assets are regulated in Thailand.
Thailand's regulatory regime

Emergency Decree on Digital Asset Businesses, B.E. 2561

Offering of digital tokens

Digital asset businesses▪

Digital token▪

Digital asset exchange▪

Cryptocurrency▪

Digital asset broker▪

Issuer▪

Digital asset dealer▪

Portal▪

Digital asset fund manager▪

Digital asset advisor▪

Digital asset custodial wallet
providerEmergency Decree on Amendment of the Revenue Code (No. 19), B.E. 2561

New types of income2▪

Share of the profit or any benefit
derived from holding or having
possession of digital tokens.

▪

Capital gains from the transfer of acryptocurrency or digital token.

Withholding tax obligations

A Complete Guide to the Regulations on Cryptocurrency and Digital Token Offering in Thailand

1

How can we differentiate between cryptocurrencies and digitaltokens, and how are they regulated?

Under Thai law, digital assets comprise two types of assets: cryptocurrencies and digital tokens.

Cryptocurrency

Digital token▪

Electronic data unit.

▪

Electronic data unit.

▪

Created on an electronic system or network.

▪

Created on an electronic system or network.

▪

Being a medium for exchanging goods, services,
rights, or digital assets.

▪

For determining:▪

Other electronic data unit as designated by theSEC.

1. The right of an investor to invest in any
project or business (i.e., investment token).
2. The right to receive specific goods, services,or other right as agreed (i.e., utility token)▪

Other electronic data unit as designated by the
SEC

However, a cryptocurrency can be deemed a digital token if the issuer intends to raise funds from the public,
and if the cryptocurrency: a) determines the right of an investor to invest in any particular project orbusiness; or b) determines the right to receive specific goods, services, or any other right as agreed upon by
the parties.

The key difference between these two types of assets is that a cryptocurrency is created to serve a
particular purpose as a medium of exchange, which might be for goods, services, or other rights, or as
consideration for trading with other digital assets. A digital token is generated to be used as adeterminant of rights, which could be rights as an investor or the right to receive specific goods orservices.

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A Complete Guide to the Regulations on Cryptocurrency and Digital Token Offering in Thailand

2

Overview of the regulatory regime on the offering of digitaltokens and operation of a digital asset business

There are two regulated activities under the Digital Asset Businesses Decree:
2.1

Offering of digital tokens to the public

2.2

Operation of digital asset businesses

Thailand's regulatory regime on the offering of digital tokens to the public

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A Complete Guide to the Regulations on Cryptocurrency and Digital Token Offering in Thailand

2.1

Offering of digital tokens to the public
A. Digital token offering

To offer regulated digital tokens (e.g., investment tokens, utility tokens for which the underlying products orservices are not ready-to-use as of the date of offering) to the public, the issuer must: (i) have the specified
qualifications; (ii) obtain approval from the SEC Office; and (iii) file a registration statement for the offering ofdigital tokens, and the draft prospectus, to the SEC. The offering must be done through the approved portal.
To promote investment tokens, the Thai Revenue Department issued the Royal Decree in August 2023
concerning an exemption related to the improvement of taxation for investment tokens. In summary, both thecorporate income tax and value added tax (VAT) exemptions are available for the offering of investment
tokens in the primary market whereas the transfer of investment tokens in the secondary market will also be
exempt from VAT. The rationale behind this is that investment tokens, similar to securities, may be
categorized as equity or debt, and consequently, the tax obligations for the offering and sale of investment
tokens, both in the primary and secondary markets, should be similar to those applicable to securities.

B. Proposed rules on ready-to-use utility tokens

In January 2023, the SEC held a public hearing regarding the draft regulations of ready-to-use utility tokens.
The SEC proposed that an issuer of ready-to-use utility tokens should be separated into two groups andregulated as follows:
Group 1: Ready-to-use utility tokens issued for consumption purposes or as a digital representation of acertificate
Primary market

Exempt from offering activity requirements.

Secondary market

The business operators are exempt from digital asset licensing requirements for
operating or providing services (e.g., a marketplace) related to this type of token.
Licensed digital asset exchanges, brokers and dealers are not permitted to list or
provide services related to this type of token.

Group 2: Ready-to-use utility tokens not specified in Group 1 (e.g., native/governance tokens,
DeFi/CeFi/GameFi tokens, and exchange tokens)

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A Complete Guide to the Regulations on Cryptocurrency and Digital Token Offering in Thailand

Primary market

If the token will be listed on a licensed digital asset exchange, it is subject tooffering activity requirements (For further details please see Part 3.1).
If the token will not be listed on a licensed digital asset exchange, it is exempt fromoffering activity requirements.

Secondary market

The business operators are subject to digital asset licensing requirements for
operating or providing services related to this type of token.
Licensed digital asset exchanges are permitted to list this type of token if the token
does not have prohibited characteristics and is in line with the listing rule.

In addition, there are other requirements, such as not being a "Means of Payment: MOP" according to the
BOT's guidelines and restrictions regarding a staking program.
These proposed rules for ready-to-use utility tokens are still subject to the result of the public hearing andhave not been finalized. These new rules could potentially impact the business plans of licensed business
operators and token issuers, and an in-depth analysis will be necessary once the rules are finalized.

C. Exempt offering: limited offering

Offering of regulated digital tokens that contain one of the following elements is considered a limited offering,and therefore it is deemed that the issuer has already obtained approval from the SEC Office and is exempt
from the requirements for filing the registration statement and draft prospectus.
▪

The offering is made to any one of these types of investors: institutional, and ultra-high net worth.

▪

The offering is made to a specific investor who has a specific relationship with the issuer, as prescribed in
the regulation. The offering must be made to not more than 50 people within a 12-month period.

▪

The offering has a total value not exceeding THB 20 million within a 12-month period.

However, the issuer must: (i) comply with other regulations prescribed by the SEC (including offering
through an approved portal); and (ii) create and disclose a report on the sale of digital tokens and theinformation regarding the holding of digital tokens by each type of investor.

D. Real estate digital token offering

The SEC Office has issued a set of regulations governing digital token offerings that refer to, or for which the
cash flow comes from, real estate. A real estate digital token offering must comply with the key additional
following conditions and requirements, which are summarized below.
▪

Real estate

The construction of the underlying real estate must be complete and ready for use, without being subject
to any property rights or disputes. There is an exception in which the token issuer has considered andissued an opinion in writing to the effect that these will not materially affect its use, and that the terms on
which the real estate is acquired will be beneficial for digital token holders in general.
▪

Investment value

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A Complete Guide to the Regulations on Cryptocurrency and Digital Token Offering in Thailand

The amount or value of the investment in real estate must not be less than 80 percent of the project's
amount or value, or the aggregate value of the real estate to be invested in must not be less than
THB 500 million.
▪

Due diligenceDue diligence must have been conducted on the real estate, so as to comply with specified requirements,
with complete and sufficient information on risk factors disclosed in the registration statement and draft
prospectus.
▪

Appraisal

There must be a full appraisal of title documents for disclosing information to investors. This must be carriedout by at least two appraisers, who have been approved by the Office of the SEC, or who fulfil specificrequirements if the real estate to be invested in is located overseas.
▪

Legal formalities

The contract to acquire the real estate must not contain any agreement or obligation that may prevent thesale of the real estate at a fair price. A draft trust deed must be prepared and must fulfil the requirements inthe applicable regulations. There must be a mechanism to ensure that the issuer will transfer assets to thetrustee as an asset pool of the trust.
▪

Types of tokens

If there are different types of digital token, the same type of digital token must have equal rights andbenefits, while each type of digital token can have different rights and benefits but only regarding thefollowing:(i) Benefits or return of capital to holders of digital tokens.
(ii) Fees or expenses to be claimed from holders of digital tokens.
(iii) Other differences that the issuer may demonstrate as the practical categorization of digital tokens,considering the benefits of holders of digital tokens in general, and possible effects on holders of digitaltokens.
▪

Establishment of a trust

The issuer must set up a trust with any of the following elements:(i) Trust for the holding of ownership or right of possession over real estate.
(ii) Trust for investment in leasehold rights in real estate.
(iii) Trust that holds shares in a special purpose vehicle (SPV) that holds the ownership or right ofpossession over real estate, whereby:▪

▪

The shareholding is at least 75 percent of the total number of issued shares, representing at least 75
percent of the total voting rights of the SPV;▪

The shareholding is for the benefit of token holders to prevent assets of the SPV from being
distributed, sold, transferred, or encumbered, without the trustee's approval, and which must comply
with the trust deed.

Trustee

The trustee must be appointed with specified roles and qualifications as set out in the regulations.

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A Complete Guide to the Regulations on Cryptocurrency and Digital Token Offering in Thailand

Based on the SEC’s public hearing, there could be some additional changes and revisions to the regulations
regarding the real-estate backed tokens.

E. Proposed rules on debt-like and infra-backed tokens

In June and August 2023, the SEC proposed to classify the new type of investment tokens that are debt-likeand infra-backed tokens, and subsequently issued the draft regulations to regulate these tokens. The SEC
views that these tokens are structured similarly to existing securities under the securities law. In this regard,
the SEC set out the new offering regulations for debt-like and infra-backed tokens to be comparable withdebt securities or infrastructure trusts, as the case may be. For example, the specific requirements relating
to the issuance of infra-backed tokens may include, but are not limited to, asset due diligence andappraisals, trustee roles and responsibilities, asset management of the issuer, and limitations of thegreenfield project and underlying assets.
These proposed rules for debt-like and infra-backed tokens are still subject to the result of the public hearing
and have not been finalized.

F. Relevant parties▪

IssuerAn issuer must obtain prior approval from the SEC Office and must file a registration statement and draft
prospectus with the SEC Office before the public offering. The offering of digital tokens can only be done
through an SEC-approved portal. For the digital token offerings which have been approved, please see:https://www.sec.or.th/TH/Pages/Shortcut/DigitalAsset.aspx#issuer▪

PortalOnce a portal has received SEC approval, it is obligated by law to conduct due diligence and a screening
process. However, inspection of the portal is not the final stage of approval for a prospective issuer, as the
SEC Office may still reject any proposed digital tokens offering project if it believes that the project conflicts
with public policy, or on any other reasonable grounds.
As of 29 August 2023, the SEC had approved seven entities as licensed portals in Thailand. You may
consider engaging any of these approved entities if you wish to offer digital tokens to the public in Thailand.
(See: https://market.sec.or.th/LicenseCheck/views/DABusiness?ico/en.)

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A Complete Guide to the Regulations on Cryptocurrency and Digital Token Offering in Thailand2.2

Operation of a digital asset business
A. Regulated activities

Digital asset exchangeThis means a center or a network established to buy, sell, or exchange digital assets by matching or
arranging counterparties, or by providing a system or facilitating a person who is willing to buy, sell, or
exchange digital assets, in order to enter into an agreement or to match orders in the normal course ofbusiness. However, this does not include systems or networks in the manner specified by the SEC Office.
Digital asset broker
This means a person who holds himself out to the public as available to be a broker or agent for any
person in the purchase, sale, or exchange of digital assets to other persons in the normal course ofbusiness, for a commission, fee, or other form of remuneration. However, this does not include brokers or
agents operating in the manner specified in the SEC notifications.
Digital asset dealer
This means a person who holds himself out to the public as available to purchase, sell, or exchange
digital assets on his own account in the normal course of business, outside of a digital asset exchange.
However, this does not include dealers operating in the manner specified in the SEC notifications.
Digital asset fund manager
This means a person who manages or holds himself out to the public as available to manage assets forother persons, in order to seek benefit from digital assets in the normal course of business. However, thisdoes not include fund managers in the manner specified in the SEC notifications.
Digital asset advisor
This means a person who provides advice to the public, whether directly or indirectly, regarding the valueof digital assets, or the appropriateness of investment into them, or regarding the purchase, sale, or
exchange of any digital asset, in the normal course of business, for a fee or other remuneration. However,this does not include advisors who provide advice as part of, or in connection with, the operation of adigital asset exchange, digital asset brokerage, digital asset dealership, or digital asset fund management,or the provision of advice to the public in the manner specified in the notifications of the SEC
Digital asset custodial wallet provider
In July 2022, the Ministry of Finance accepted and issued the principle and regulations regarding licensing
requirements for operating a digital asset custodial wallet service. A digital asset custodial wallet provider
is defined as a person who provides services or holds himself out to the public as available to provide one
or other of the services described below, in the normal course of business, and in consideration for a feeor other remuneration.
(i) Storing or keeping digital assets.
(ii) Managing customers' cryptographic keys or any material that must be kept secret, for full or partial

authorization of digital assets transfer or transaction approval.

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A Complete Guide to the Regulations on Cryptocurrency and Digital Token Offering in Thailand

The services under paragraph one shall not include services which are a part of specific services
prescribed by the SEC.
Furthermore, in June 2023, the SEC proposed additional exemptions to reduce the costs and burdens forthe business operators. While this proposed rule is not yet effective, it reflects the SEC’s intention topromote the digital asset industry and will relieve some of the burden from business operators, once
effective.
A license applicant could be a bank, securities company, other financial institution, or a newly establishedcompany. However, the applicant must ensure that it has all of the qualifications and meets all therequirements in the regulations to be prescribed by the SEC.
As of August 2023, the SEC has not yet granted any digital asset custodial wallet provider license toanyone. To promote the custodial wallet business in Thailand, the SEC held another public hearing on 23
August 2023 to propose some relaxation in the regulations.
Any other business designated by the Ministry of Finance (MOF). These operators must obtain a licensefrom the MOF upon the recommendation of the SEC, and must comply with certain regulatory requirements.
▪

For the list of licensed entities, please visit the SEC website:
https://market.sec.or.th/LicenseCheck/views/DABusiness?exchange/en

B. Exempt activities

Generally, all digital asset business operators are subject to licensing and regulatory requirements.
However, the following scenarios are exempt.
▪

Business operations by the BOT that could be considered digital asset businesses, provided that thedigital assets are issued and processed by the BOT.

▪

Business operations by an exchange, broker, or dealer offering digital token exchange services, provided
that: a) the exchange is done solely for the same types of digital token; and b) the digital tokens are utility
tokens (or other digital tokens that entitle the holder to receive the right from utility tokens), and theunderlying product or service must be ready to use as of the date of the offering.

▪

Digital asset broker or dealer that provides sale or purchase services only for digital assets, whose issuer
has pegged the value against the THB at a fixed exchange rate, and has a clear mechanism to fix thevalue (e.g., THB-pegged stable coins, subject to their characteristics). The sale or purchase of digitalassets must only be done in exchange for THB at the specified set value, and the payment must be madethrough a financial institution under the anti-money laundering law.
Please note, however, that the issuer of stable coins will also need to take into account other applicablelaws such as the payment system law and currency law, under the supervision of the BOT and the MOF.

10 A Complete Guide to the Regulations on Cryptocurrency and Digital Token Offering in Thailand

3

Guideline for various types of market participants

3.1

Guideline for entities planning to issue digital tokens
A. Issuer▪

Public offering of newly offered digital tokens must be done by a company (either private or public)
established in Thailand.

▪

The directors, executive directors, or persons with management power must not have any prohibitedcharacteristics prescribed by the SEC Office (e.g., regarding bankruptcy or criminal offenses).

▪

A company intending to conduct digital token offering does not have to operate in the technology industry
or apply blockchain technology to its business. However, it must have a fundamentally sound businessplan with audited financial statements in compliance with the Thai Financial Reporting Standards, doneby an auditor recognized by the SEC Office, or must meet the qualifications prescribed by the SEC
Office.

▪

The company must disclose its ongoing business performance and financial statements in accordancewith the regulations prescribed by the SEC Office.

B. Digital token▪

A digital token must be explicitly characterized as an investment token or a utility token, and the company
must clearly state the rights of the holder or investor, as well as other material information, in the draft
prospectus.

▪

The source code of the underlying smart contract must be disclosed as prescribed by the SEC Office,and periodic reporting pertaining to the status and progress of the project must be submitted, asprescribed under the regulations.

▪

The source code in the smart contract or any other mechanism used in place of a smart contract must
contain details that correspond with the information in the draft prospectus.

11 A Complete Guide to the Regulations on Cryptocurrency and Digital Token Offering in Thailand

C. Registration statement and prospectus▪

The issuer must file a registration statement and a draft prospectus, to obtain approval from the SEC
Office before the offering. The disclosure of information and the marketing of the digital token offeringmust comply with the applicable regulations.

▪

The registration statement and draft prospectus must include important information as prescribed in theregulations; for example:▪

Fact sheet providing an overview of the characteristics of the issuer and the digital tokens.

▪

Information regarding the issuer, including the intended use of the proceeds.

▪

The issuer's business plan.

▪

Information regarding the digital tokens, including any special characteristics and significant risks.

▪

Information about the digital token offering.

▪

Certification that the information described above is true and correct, signed by the personnel
specified under the law.

D. Offering process▪

▪

An offering may only be done through an approved portal and to the following investors:▪

Institutional, ultra-high-net-worth, high-net-worth investors, with no limit on investment.

▪

Retail investors. The SEC Office has placed an investment limit of THB 300,000 per person per roundof offering. In other words, a retail investor may only invest up to THB 300,000 in a particular digitaltoken offering, but is free to invest up to THB 300,000 in other digital token offerings. Based on the
SEC’s recent public hearing no. 41/2566 (23 August 2023), it intends to adjust the investment limit ofretail investors by removing the investment limit in the case of real-estate backed and infra-backed
tokens, from the original limit of THB 300,000 per person per offering.

▪

Regarding the issuer, the offering limit for retail investors in each round of offering is the higher of ≤four times the shareholders' equity of the issuer, and ≤ 70 percent of the total offering amount per
round.

The issuer may receive THB or "approved cryptocurrencies by the SEC Office" (i.e., BTC, ETH, XRP,
and, XLM) for payment for digital tokens.

12 A Complete Guide to the Regulations on Cryptocurrency and Digital Token Offering in Thailand

E. Timeline

F. Offering period▪

The issuer must complete the sale of digital tokens within six months from the date the SEC approves thedigital tokens offering.

G. Fees▪

Approval application fees: THB 300,000.
▪

Submission of a registration statement and prospectus (filing for initial disclosure of information):
THB 300,000.

▪

Submission of a registration statement and prospectus (filing for effectiveness): 0.05 percent of thetotal value of digital tokens offered for sale.

13 A Complete Guide to the Regulations on Cryptocurrency and Digital Token Offering in Thailand

3.2

Guideline for entities planning to operate as an ICO portal
A. Portal▪

A portal business must obtain prior approval from the SEC before it can begin operations.

▪

A portal must be a company (either private or public) established in Thailand, with registered capital of
not less than THB 5 million, with a proper operation system, suitable management structure, andsufficient responsible personnel to operate the portal. The financial status of the portal operator must be
good and should not pose any potential risk to its customers.

▪

A portal and its operation system must comply with the SEC notification regarding the security of IT
systems.

▪

The directors, executive directors, and people with management power over the portal must not have any
prohibited characteristics as prescribed by the SEC.

▪

A portal shall not provide service to issuers if they are related in a way that could impact on their duty
performance and independence.

▪

The major responsibilities of portals are similar to financial advisors in traditional IPO deals, and funding
portals in crowdfunding deals.
Key responsibilities regarding the offering project:▪

The portal must conduct analysis to ensure the characteristics of the digital tokens to be offered, thequalifications of the issuer, the accuracy of the information prescribed in the registration statement andprospectus, and the accuracy of any information disclosed on the portal, as required by the SEC
Office.

▪

The portal must provide opinions to the SEC on whether the offering project is fully qualified andmeets the requirements prescribed by law.

▪

The portal must provide knowledge and advice to the issuer about its duties and responsibilities
toward investors, including the applicable rules, conditions, and procedures.

Key responsibilities regarding investors:▪

▪

The portal must perform the "know your customer" (KYC) and customer due diligence (CDD)
procedures for all investors, and must categorize and inform investors of their rights and limitations,and provide a knowledge test.

Portals will be considered "financial institutions" under the anti-money laundering (AML) and counterterrorism financing (CTF) laws, and must comply with several obligations, including KYC and CDD
processes, and transaction reporting.

14 A Complete Guide to the Regulations on Cryptocurrency and Digital Token Offering in Thailand

B. Timeline▪

The SEC will consider granting approval for a portal within 90 days from the date the SEC Office receives
the application and all of the documents as prescribed in the public manuals, from the portal.

▪

The portal must begin its business operations within 180 days from the date it obtains approval
from the SEC.

C. Fees1▪

Approval application fee: THB 50,000.

▪

Annual fee: THB 100,000.

3.3▪

Guideline for investors

For public offerings of digital tokens:▪

Institutional, ultra-high-net worth, high-net-worth investors: No limit.

▪

Retail investors: THB 300,000 per person per round of offering.

▪

Trading cryptocurrencies or digital tokens on an exchange or with a dealer or a broker: No limit.

▪

For investments in both the primary and the secondary market, the investor can be Thai or foreign.

1

If the applicant's business is in its first year of operation, the fee is to be paid to the SEC before the date the business commences.

15 A Complete Guide to the Regulations on Cryptocurrency and Digital Token Offering in Thailand

3.4

Guideline for entities planning to operate digital asset businesses

A.

Digital asset exchange, broker, dealer
Digital asset exchange

Required licenseunder the Digital
Asset Decree

Digital asset broker

Digital asset dealer

License from the MOF upon the recommendation of the SEC.

Key qualifications
Company established in Thailand.
for license
A digital asset exchange must not be a digital asset dealer, and vice versa.
application
Required paid-up
registered capital▪

For an exchange ≥ THB
50 million.

▪

For a broker ≥ THB
25 million.

▪

For a non-asset keeping
exchange ≥ THB 10
million.

▪

For a non-asset keeping
broker ≥ THB 1 million.

▪

▪

For an asset-keeping
exchange that has no
ability to access ortransfer customers'
assets without theirapproval on a one-timebasis ≥ THB 10 million.

For an asset-keeping
broker that has no
ability to access ortransfer customers'
assets without theirapproval on a one-timebasis ≥ THB 5 million.

▪

For a dealer ≥ THB
5 million.

Net capital (NC)
maintenanceExchanges, brokers, and dealers must maintain net capital as prescribed in theapplicable regulations.

Consideration
under AML andCTF laws

The operator will be considered a "financial institution" under AML and CTF laws andmust comply with several obligations, including KYC and CDD and transaction
reporting.

Fees

▪

License fee:
THB 2.5 million for
operating acryptocurrencies
exchange; THB 2.5
million for operating a
digital tokens exchange.

▪

Annual fee: 0.002 percentof the total trading value; ▪
the annual fee is in therange of THB 0.5 million– THB 20 million.

▪

License fee:▪
THB 1.25 million for
operating acryptocurrencies
brokerage; THB 1.25
million for operating a
digital tokens▪
brokerage.
Annual fee: 0.001
percent of the total
trading value; theannual fee is in therange of THB 0.25
million – THB 10
million.

License fee: THB 1
million for acryptocurrencies
dealer; THB 1 million
for a digital tokens
dealer.
Annual fee:
1 percent of the profit(capital gain) from thetrading; the annual fee
is charged within therange of THB 0.1
million – THB 5
million.

License application fee: THB 30,000 per license.

16 A Complete Guide to the Regulations on Cryptocurrency and Digital Token Offering in Thailand

B.

Digital asset advisor, fund manager, and custodial wallet provider
Digital asset fundmanager

Required licenseunder the Digital
Asset Decree

Digital asset advisor

Digital asset custodial
wallet provider

License from the MOF upon the recommendation of the SEC.

Key qualifications
for license
Company established in Thailand.
application
Required paid-up
registered capital▪

For asset-keeping▪
managers, or managers
who provide services to
non-institutionalcustomers ≥ THB 25
million.

▪

For non-asset keeping
managers who provide
services only toinstitutional customers ≥THB 10 million.

For an advisor ≥ THB 1 ▪
million.

For a custodial wallet
provider ≥ THB 50
million.

Net capital (NC)
maintenanceFund manager, advisor, and custodial wallet provider must maintain net capital asprescribed by the applicable regulations.

Consideration
under AML andCTF laws

The operator will be considered as a "financial institution" under the AML and CTF
laws and must comply with several obligations, including KYC and CDD andtransaction reporting.

Fees▪ License fee:
▪ License fee:
▪ License fee:
THB 0.5 million for
THB 15,000 for
THB 1 million for
operating as aoperating a
operating a digital asset
cryptocurrencies fundcryptocurrencies
custodial wallet
manager; THB 0.5
advisor; THB 15,000
provider.
million for operating as afor operating as a
▪ Annual fee: 0.001
digital tokens funddigital tokens adviser.
percent of the total
manager.
▪ Annual fee: THB
value under custody; the▪ Annual fee: 0.001
25,000.
annual fee is in thepercent of the total value
range of THB 0.25
under management eachmillion – THB 10
calendar year; the annual
million.
fee is in the range of THB
0.25 million – THB 10
million.
License application fee: THB 30,000 per license.

License application fee:
THB 50,000 per license.

17 A Complete Guide to the Regulations on Cryptocurrency and Digital Token Offering in Thailand

The SEC held a public hearing on 25 July 2022 regarding the qualifications of authorized directors and csuite management. This public hearing proposed the amendments to the required experiences and set out
the composition of board directors and audit committee.
In addition, the SEC aims to increase the paid-up registered capital and adopt a risk-based capital structure
for ongoing Net capital (NC) maintenance. Please note that the proposed rule above has not yet been
finalized and is subject the SEC's final decision.

C.

Timeline

The digital asset business operator must begin its business operations within 180 days from the date that it
obtains approval from the SEC.

18 A Complete Guide to the Regulations on Cryptocurrency and Digital Token Offering in Thailand

D.

Ongoing requirements for digital asset businesses

There are a number of key additional requirements that digital asset business operators should take into
account.
Custody of customers' assets
Asset-keeping business operators must keep no less than 90 percent of the total customers' assets in a cold
wallet. An operator may keep the assets in its own cold wallet if the total value of the customers' assets is
below THB 15 million. If the total value is THB 15 million or more, and the operator keeps the assets formore than five consecutive days, the assets must be kept in a custodian service provider's wallet.
The SEC has also amended and strengthened the rules on custody of assets, which include the following
key contents:▪

The use of customers' assets, fiat money, or digital assets for the benefit of another client or any otherperson is prohibited.

▪

Seeking benefits from customers' digital assets is prohibited, including in the form of deposit and lending
to other persons.

▪

The digital asset business operator must deposit customers' fiat money with commercial banks. The
digital asset business operator and the customers may agree on an interest rate not exceeding the actual
rate the business operator receives from the commercial banks.

▪

Customers' assets must be reconciled every business day to ensure accurate and updated records ofcustomers' assets.

Operation of other businesses
If a business wishes to operate a new business line, it must be able to demonstrate that the new businessline supports the core business, and that it will not create a conflict of interest with the digital asset business,or pose a risk to the customers' assets. If the new business meets the mentioned criteria, the business
operator could carry on the new business without the SEC's approval; otherwise, approval from the SEC will
be granted on a case-by-case basis.
Outsourcing
A business operator wishing to outsource key aspects of its businesses must be able to demonstrate that it
has implemented appropriate measures as prescribed by the applicable regulations, and the outsourcing
agreement must have the substance as prescribed by the SEC.

19 A Complete Guide to the Regulations on Cryptocurrency and Digital Token Offering in Thailand

Listing rules
A licensed digital asset exchange is restricted from selecting and listing a digital token that has the following
characteristics:▪

Meme token.

▪

Fan token.

▪

Non-fungible token (NFT).

▪

Digital token issued by digital asset exchanges themselves or related persons, and used inblockchain transactions.

A licensed digital asset business operator is also prohibited from providing services regarding privacy coins.
Restriction on payment by digital assets
In March 2022, the SEC issued a notification that prohibits licensed digital asset business operators fromacting or providing any service in a manner that will promote, support, or encourage the use of digital assets
as a means of payment for goods and services. The prohibition includes advertising; providing any wallet
service, system, or tool that would facilitate the acceptance of digital assets as payments, and to transfer
digital assets from a customer's account to another for the purpose of making payment.
Restriction on deposit taking and lending services
Since June 2023, digital asset business operators are restricted from providing, supporting, or advertising
any services that involve deposit taking and lending. The prohibition includes promising returns or benefits
from depositing the digital asset with the digital asset business operator, unless;▪

the staking of digital assets are part of blockchain consensus mechanism,▪

it is a distribution of the digital assets received from a blockchain hard fork or soft fork and the airdrop
from token issuers,▪

it is a promoting activity which is in line with the SEC’s marketing rules, and▪

it is general information or knowledge sharing on decentralized finance.

Advertisements
Digital asset business operators will be prohibited from advertising specific cryptocurrency in public spaces.
Digital asset business operators may only advertise their services (rather than specific cryptocurrency), andonly through their own respective official advertising channels, in order to prevent impulsive buying. Digitalasset business operators are also obliged to seek the SEC's approval before running each advertisement,
and to report the advertisement costs to the SEC. Furthermore, the service of an introducing broker agent
for digital asset operators regarding cryptocurrency (but not digital tokens) is prohibited.

20 A Complete Guide to the Regulations on Cryptocurrency and Digital Token Offering in Thailand

IT standards
To ensure business operators' IT security, the SEC sets the rules on the establishment of information
technology systems. This is summarized below:▪

Establishing IT-related risk assessment criteria to define the entity's risk level, and to specify standards of
IT security controls and oversight that are suitable to apply to licensed entities.

▪

Separating clear roles and responsibilities for departments and responsible persons, to ensure the "threelines of defense" principle.

▪

Setting the requirements and guidelines to be in line with international standards and financial IT
regulations.

Wallet management and key management
In December 2022, the SEC issued regulations and guidelines regarding wallet and key management, whichbecame effective on 16 January 2023. According to the regulations, the digital asset operators that keep
customers' assets must prepare: 1) policy and guidelines for overseeing risk management and managementof digital wallets; 2) policy and procedures for developing and managing digital wallets securely; and 3) acontingency plan in case an event occurs that may affect the management system of digital wallets andkeys. These requirements could be used as references for the SEC's minimum standards concerning wallet
and key management. In practice, it requires a thorough review of the policies and operational systems toensure that the business operators comply with the minimum standard set out by the SEC.

3.5 Guideline for entities planning to issue NFTs or operate an NFT
marketplace
A non-fungible token (NFT) is a form of a digital token with unique characteristics that cannot be replaced by
the same type of electronic unit and amount.
Generally, the issuance and trading of NFT is not regulated by the SEC, unless the NFT falls under thescope of digital assets as specified by the regulations. That is to say:(i)

Is not a medium of exchange for acquiring goods, services, or any rights or exchange between digitalassets.

(ii) Does not specify the right of a person to participate in an investment in any project or business.
(iii) Does not specify the right of a person to acquire specific goods, specific services, or any other right.

If the characteristics of the NFT deem it to be a digital asset – meaning it has any of the characteristics
described in items (i), (ii), or (iii) above – (1) issuance would be subject to offering requirements; and (2) theplatform allowing the sale and purchase could be considered a digital asset business, depending on thedetails of the platform. For this reason, a platform that acts as a marketplace could be subject torequirements under the digital asset law, such as the requirement to obtain a digital asset business license.
If the particular NFT is merely storage of the underlying digital file (such as an image, audio file, or video file)using blockchain technology, without providing any other additional right to the holder, and if it is notpossible to separate the token from its underlying digital file, that NFT will not be considered as a digitalasset under the SEC regulations and the Thai digital asset law.
It should also be emphasized that digital asset exchanges in Thailand are not allowed to list NFTs to be
traded on their platforms.

21 A Complete Guide to the Regulations on Cryptocurrency and Digital Token Offering in Thailand

Part III. Anti-money laundering
regulations
A licensed digital asset business operator and approved portal will be deemed to be a financial institution
under the Anti-Money Laundering Act, B.E. 2542 (1999) according to the Digital Asset Decree, which
creates obligations for the role of "reporting entities" (REs) under the AML laws, as summarized below.

Know your customer (KYC) and customer due diligence (CDD)
1. On-boarding process

REs must obtain specified customer information, verify evidence, and identify customers. The fields ofinformation required, and measures of identification and verification, differ, depending on the product orservice's money-laundering risk level. REs must conduct risk assessment using specific factors provided in
the Anti-Money Laundering Office notifications.
Measures for medium to high-risk products will require additional information that is not available from an ID
card or passport, and will also require intensive measures to verify customer evidence. There are also
requirements for customer identification measures, to prove that the person who executes a transaction is
the same person that appears in the evidence. Methods of identification depend on the delivery channels, assummarized below.

22 A Complete Guide to the Regulations on Cryptocurrency and Digital Token Offering in Thailand2. Ongoing compliance requirements

The Ministerial Regulation on Customer Due Diligence, B.E. 2563 (2020) require REs to have several AML
measures, including, but not limited to: maintenance of AML internal policy and guidelines; customer risk
assessment; transaction monitoring; a sanctions list database; ultimate beneficial owner identification;transaction reporting; and specific internal controls.

23 A Complete Guide to the Regulations on Cryptocurrency and Digital Token Offering in Thailand

Part IV: Baker McKenzie Bangkok –FinTech and digital asset expertise
Baker McKenzie Bangkok – FinTech expertise
As one of the first to recognize the convergence of technology and financial services, we are the only law
firm with an established global and local FinTech footprint, with dedicated teams of FinTech and digital law
experts. We can offer a combination of expertise in the financial services market, with digital innovation
capabilities.
We have been providing legal services to global, regional, and local clients in financial markets, including
money markets and capital markets, in various areas. Our expertise includes, for example: financial
regulations; derivatives; structured finance; wealth management; fund investment; private banking; capital
market transactions; anti-money laundering; exchange control; general commercial and corporate legal
issues such as the enforceability of contracts; and bankruptcy and business reorganization.
We also provide legal services to various clients involving a broad range of FinTech products.

Blockchain
Businesses wishing to integrate
blockchain into their services▪

Prepare necessary legal documents for the
purpose of operating a platform or digitizing thebusiness.

▪

Identify key legal challenges and ensurecompliance with the industry and technology
laws, including the PDPA, electronictransactions, and cybersecurity.

Infrastructure platform andcollaboration projects▪

Design and structure the legal relationshipbetween entities involved.

▪

Prepare legal documents governing therelationship between the parties and users of
the platform.

▪

Ensure compliance with applicable laws
regarding the parties and technology laws,
including the PDPA, electronic transactions, andcybersecurity.

Digital assets
Issuer▪

Structure digital token offering and tokenization
projects for legal compliance▪

Prepare project documents including prospectus
and white paper) reflecting commercial needs
and compliance with laws.

▪

Consult with regulators when appropriate.

ICO portal▪

Obtain approval from the SEC.

▪

Prepare legal documents and agreements forbusiness operations.

▪

Structure and prepare transaction documents
for digital token offering and tokenization
projects, for legal compliance.

24 A Complete Guide to the Regulations on Cryptocurrency and Digital Token Offering in Thailand

Digital asset businesses
Digital asset exchange▪

Obtain applicable licenses.

▪

Design and implement legal documents andagreements for business operations thatreflect industry practices and regulatorycompliance, including T&C, privacy policy,
outsourcing agreements, and collaborationagreements.

▪

Ensure regulatory compliance applicable toeach type of digital asset business, covering
NC maintenance, IT security, and AML
compliance.

▪

Maintain and implement policies for investor
protection, client asset handling, and KYC
and CDD procedures.

Digital asset broker
Digital asset dealer
Digital asset advisor
Digital asset fund manager
Digital asset custodial wallet provider

Key clients in the FinTech sector▪

Financial institutions including commercial banks and insurance companies.

▪

Intermediaries in the capital markets, including securities companies, fund management companies, andfunds of large corporations.

▪

Tech companies.

▪

Telecom companies.

▪

E-commerce platforms.

▪

Payment platforms and payment solution providers.

▪

FinTech companies.

▪

Start-ups in digital businesses and FinTech.

FinTech innovation
Baker McKenzie is on the steering committees for governments, and is the only law firm adviser to the World
Economic Forum's "Role of Financial Services Project," a multi-year initiative exploring the effect oftechnology-enabled innovation on financial stability.
We take a multi-disciplinary approach to legal and commercial issues in FinTech, and can offer a
combination of expertise in the financial services market, with digital innovation capabilities.
Through the dedicated global team and Asia-Pacific FinTech Group, our lawyers can handle cross-borderwork seamlessly, and are ahead of the curve, both market-wise and regulation-wise, through insight sharedacross the globe.
We have represented all types of FinTech players in global, regional, and local markets, and haveexperience in various FinTech products. The majority of our in-depth work began in 2012, when FinTech
products began to grow rapidly in Thailand, although we have been involved in the use of technology andinnovation in the financial markets since the very early days of the Firm. We have assisted the largest and25 A Complete Guide to the Regulations on Cryptocurrency and Digital Token Offering in Thailandfastest-growing companies in and outside Thailand on matters regarding the use of technology anddigitalization in financial markets, including money and capital markets.

Across all FinTech areas in more than 200 legal matters during 20192023▪

E-payment.

▪

Robo-advisor.

▪

Digital banking.

▪

Alternative credit adjudication.

▪

Online consumer finance.

▪

Innovative KYC and CDD.

▪

Online money remittance.

▪

Cryptocurrencies and digital tokens.

▪

Blockchain-based platforms.

▪

JVs and M&As in FinTech.

▪

P2P lending.

▪

Venture capital investments in FinTech.

▪

Crowdfunding.

Regarding all key FinTech-related laws and regulations▪

Financial regulations.

▪

Exchange control.

▪

E-payment regulations.

▪

IP protection.

▪

Anti-money laundering.

▪

Cybersecurity.

▪

Data protection.

▪

Consumer protection.

▪

E-transactions.

This guide has been prepared for the general information of clients and professional associates of Baker McKenzie. It is not legal
advice, and should not be regarded as a substitute for legal advice. To the fullest extent allowed by law, Baker McKenzie excludes all
liability (whether arising in contract, negligence, or otherwise) regarding all and each part of this communication, including, without
limitation, any errors or omissions. No client or other reader should act or refrain from acting on the basis of any matter contained in thisdocument, without first seeking the appropriate legal or other professional advice on the particular facts and circumstances.

26 A Complete Guide to the Regulations on Cryptocurrency and Digital Token Offering in Thailand

For further information, please contact:
Komkrit Kietduriyakul+66 2666 2824 ext. 3024
komkrit.kietduriyakul@bakermckenzie.com

Kullarat Phongsathaporn+66 2666 2824 ext. 3106
kullarat.phongsathaporn@bakermckenzie.com

Authors
Komkrit Kietduriyakul
Kullarat Phongsathaporn
Phetrada Kampusiri
Suthawadee Riumkidgarn
Thorroong Phatiwet

27 A Complete Guide to the Regulations on Cryptocurrency and Digital Token Offering in Thailand

Baker McKenzie delivers integrated solutions to complex
challenges.
Complex business challenges require an integrated response across different markets, sectors andareas of law. Baker McKenzie's client solutions provide seamless advice, underpinned by deeppractice and sector expertise, as well as first-rate local market knowledge. Across more than 70
offices globally, Baker McKenzie works alongside our clients to deliver solutions for a connectedworld.

bakermckenzie.com© 2023 Baker & McKenzie Ltd.. All rights reserved. Baker & McKenzie Ltd. is a member firm of Baker & McKenzie International, a global law
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