Thai SEC Bans Crypto Exchanges from Offering Staking Services

• Last year, the Thai SEC outlawed cryptocurrency payments but did not prevent locals from purchasing it as an asset.
• The Monetary Authority of Singapore (MAS) recently banned crypto service providers from providing lending and staking services to retail users.
• The recent measures are meant to prevent a similar market crash as witnessed in 2022.

The Thai Securities and Exchange Commission (SEC) has announced a ban preventing crypto exchanges from offering lending services. The move has been described as an effort to prioritize investor protection.

According to the new regulations, crypto exchanges must provide proper warnings that underline the risks involved in trading cryptocurrencies. All service providers are required to display the following message:

Cryptocurrencies are high-risk. Please study and understand the risks of cryptocurrencies thoroughly, because you may lose the entire investment amount.

The SEC also noted that service providers must ensure that the cautionary message is eligible and that clients consent to and acknowledge the associated risks with crypto trading before using any platform

The regulator also noted that investor sustainability uations will determine the amount that users are allowed to invest in cryptocurrency. The new rules will take effect on July 31st

The news comes hours after reports emerged that Singapore had banned crypto exchanges from offering lending and staking services to retail customers. The Monetary Authority of Singapore (MAS) also requires crypto exchanges to transfer all customer assets into a Trust before the end of this year as a precautionary step to reduce the likelihood of another disaster like FTX and to avoid commingling user funds

The measures taken by the Thai SEC and Singapore’s MAS are a direct response to the lending crisis that occurred in 2022. Several cryptocurrency lending companies that had amassed billions in deposits from customers by promising significant returns failed to back up their claims as a result of the bear market. Some of the top lending protocols, such as BlockFi and Celsius, filed for bankruptcy, causing investor funds to become clogged up in the bankruptcy process.

The rise of crypto regulation

Several nations are implementing measures to regulate crypto activities to prevent similar situations. The European Union recently gave the go-ahead to the Market in Crypto Assets (MiCA) law, which provides regulatory clarity for crypto activities.

The UK has also seen encouraging signs in its quest to regulate cryptocurrencies. As reported last week, the Financial Services and Markets Act 2023 has received Royal Assent. The bill seeks to recognize crypto trading as a regulated financial activity.

However, the US remains slow in launching a uniform policy for cryptocurrencies. But the US SEC has taken several enforcement measures against crypto firms it believes are violating US securities laws.

It appears that the US’s slow response to regulating the crypto industry could see an exodus of crypto service providers to Europe and other regions with clear policies.