DeFi sector in Thailand faces tougher times ahead of stricter regulation
- Thailand’s SEC has intensified efforts to make DeFi businesses comply with their business licensing.
- The move is coming after a DeFi-based project was launched without the necessary approval.
- All digital asset businesses without the prerequisite license will be punishable under the Digital Assets Act.
The DeFi sector in Thailand could be facing a more restricted environment as the country’s Securities and Exchange Commission has stepped up in its regulation.
The regulatory body announced that digital tokens issued and offered for transactions must receive the necessary approval. This also includes decentralized finance (DeFi) projects.
The move is coming after the launch of a DeFi project
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The SEC warned entrepreneurs who are looking to roll out DeFi projects to obtain the necessary license if their projects involve digital tokens. Otherwise, they should be prepared to face the wrath of the law.
The watchdog warned that those carrying out digital asset business without the proper license will be punished under the Digital Assets Act.
It made this warning following the launch of a DeFi farming platform, Tuktuk Finance, on the Bitkub Chain.
Upon launch, the token’s price surged to hundreds of USD before falling heavily to $1 within a few minutes.
The platform’s official website reported that the protocol has drawn a total value locked (TVL) of $18 million. However, the TUK token has grown to $1.93 from its previous drop of $1, given the project a market capitalization of $7.1 million.
Thai’s SEC intensifies regulatory efforts
The Thai SEC has been largely silent on the activities of the DeFi sector. However, this was its first comment on DeFi projects undertaken by smart contracts on decentralized blockchains without intermediaries.
The SEC added that traders need to study DeFi projects before getting involved in their security and technical aspects.
It also stressed the requirement for digital asset operators to obtain the proper licenses if they want to do business in the country. These groups of businesses include investment advisers, private fund management firms, digital asset dealers, digital asset brokerages, as well as exchanges.