Thailand’s Securities and Exchange Commission (Thai SEC) has rolled out new rules for digital asset business operators that provide custodial services to ensure the safety of clients’ funds.

Thai SEC Issues New Custodial Regulations

According to a press release, the Thai SEC issued the new guidelines to protect crypto investors from unfavourable events similar to the ones that happened last year.

The new rules were outlined in three major segments, including clear policies and guidelines for overseeing the risk management of digital wallets. Thai SEC also requested that digital asset custodians communicate with regulators and create action plans for work supervision to ensure compliance with such policies.

The commission further requested that custodians provide policies for designing, developing, and managing keys to digital wallets, ensuring the safety and security of related information.

The securities regulator also insisted that custody providers create a contingency plan in case of unforeseen events affecting the management system for clients’ assets. The rule requires affected organisations to outline and test action procedures, designate appropriate persons, and report such events.

Additionally, the requirements included an audit system of security and digital forensic investigation for situations involving the security systems of clients’ digital assets.

Thai SEC revealed that the regulations have been in effect since January 16, 2023, and custodians must comply within six months.

“Pursuant to the transitional provisions, digital asset business operators who had provided custody of clients’ assets prior to the effective date of the regulations are required to fully comply within six months as from the effective date,” the securities watchdog said.

Thai SEC Tightens Crypto Regulations

The latest development comes a month after the Thai SEC revealed that it was working on more stringent crypto regulations as the digital asset industry was vulnerable and needed oversight in the aftermath of crypto exchange FTX’s collapse.

Before FTX’s demise, the securities regulator already toughen its stance against crypto firms. Crypto Saving Expert reported in September 2022 that the regulator was looking to ban crypto companies from offering staking and lending services after crypto exchange Zipmex’s bankruptcy.

~ By William A. Frederick ~