The Securities and Exchange Commission (SEC) of Thailand is working to better protect cryptocurrency investors by introducing new rules for crypto custody services.
On January 17, the thai sec public a regulation that requires virtual asset service providers (VASPs) to establish a digital wallet management system to ensure effective custody. The new rules target crypto custodians or VASPs that provide cryptocurrency storage services.
The regulation includes three main requirements, including the provision of policies and guidelines to oversee the risk management of digital wallets and private keys. The rules require value-added service providers to communicate with regulators regarding such policies and provide action plans to ensure compliance.
Additionally, the SEC requested crypto custodians to provide policies and procedures for designing, developing, and managing digital wallets and keys. The authority will also require crypto custodians to establish a contingency plan in case of unforeseen events that may affect the wallet management system.
“This includes establishing and testing action procedures, appointing responsible parties, and reporting the occurrence,” the SEC stated, adding:
“An audit of the security of the systems is also required, as well as a digital forensic investigation in case of any event that affects the security of the systems related to the custody of digital assets, which could cause significant impacts on the assets of the clients”.
According to the announcement, the new regulations have entered into force as of January 16, 2023. Crypto asset depositories must fully comply with it within a period of six months from the date of entry into force.
The latest cryptocurrency regulations from the SEC of Thailand align with the plans of the authority of adopt regulations for cryptocurrencies stricter after industry failures, such as the collapse of FTX. In early January, the authority would have started a new investigation against local cryptocurrency exchange Zipmex, alleging that the firm has been providing digital asset fund management services without permission.
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Thailand’s SEC Publishes Rules for Crypto Custody Providers