Thailand set to tighten rules for opening new accounts at crypto exchanges
- Starting July, AMLO will require all exchanges to use dip-chip machines for identity verification.
- This move will need all users that want to open digital accounts to visit exchanges physically.
- Players in the Thai crypto space believe this change will inhibit the growth of the nascent sector.
Thailand’s financial watchdogs are gearing up to introduce new policies that will require crypto exchanges to verify the identities of new users in person. The country’s Anti-Money Laundering Office (AMLO) will mandate exchanges to use a dip-chip machine for identity verification starting July 2021. Reportedly, dip-chip machines scan a chip integrated into Thai citizen ID cards.
At the moment, new users can verify their identities with crypto exchanges by submitting their documents online. However, when the new policy comes into effect, users that want to open an account will have to be physically present to have their IDs scanned for verification. Allegedly, these changes might prevent foreign investors from accessing crypto exchanges in the country, seeing as they don’t have Thai IDs.
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However, digital asset intermediaries aim to discuss the matter at an upcoming forum organised by the Thailand Digital Asset Operators Trade Association. During this event, the attendees will gather questions to present to relevant government agencies, such as the Securities Exchange Commission (SEC) and AMLO.
The new identity verification system might harm Thai’s crypto space
Reportedly, Thailand had 697,780 crypto exchanges as of April 26, a steep rise from 160,000 at the end of 2020. While the dip-chip requirement seeks to ensure that crypto exchanges get accurate KYC information from new users as cryptocurrencies continue gaining popularity in the country, industry experts worry that this change will be detrimental to the country’s crypto sector.
For instance, Poramin Insom, the co-founder and director at Thai crypto exchange Satang Corp, said most digital asset exchanges in the country are still busy preparing their systems to accommodate the influx of clients as new account applications continue to flow in. He went on to note that if the application process becomes more complicated, it might inhibit the growth of the crypto space.
The process of verifying new digital accounts in Thailand still takes exchanges a significant amount of time despite being entirely electronic. This is because the exchanges have to review the submitted documents to ensure they comply with the SEC’s KYC rules. As such, this process is set to take longer if every new user has to physically visit an exchange to have their ID scanned for verification purposes.