Law on Digital Assets Businesses Operation

Nowadays, digital assets are used as a means of fundraising for the general public as a medium of exchange, and as a means of trading or exchanging in a digital assets exchange center. Thailand has, therefore, enacted the law on digital assets business operation to supervise fundraising through digital assets, including business operations and activities relating to digital assets, and to enable technology to create a sustainable economic and social development. This will ,at the same time, support and facilitate potential business activities with various fundraising tools; support an investor to have precise data for investment decisions; protect an investor from being fraudulent or being deceived by a dishonest person; prevent the use of digital assets to support illegal transactions; ensure that trading in digital assets exchange is fair, transparent and verifiable; and provide a mechanism to maintain the country's overall financial and economic stability. In this context, the following criteria relating to private transactions will be explained.

Digital Assets

  • Cryptocurrency is an electronic data unit created as a medium for an exchange of goods, services, other digital assets or any other rights. It can be used as a medium for an exchange of goods and services if a user accepts it. Currently, cryptocurrency is not the money that any central bank in the world guarantees to be used as legal tender. The cryptocurrencies which are well-known are Bitcoin and Ethereum etc.

  • Digital token is an electronic data unit created to determine a person's rights to distribute income or the rights to acquire goods and service or other rights (utility token) as agreed with a token issuer which may offer to sell a token through the Initial Coin Offering process (ICO).

  • ICO fundraising is a form of fundraising that uses Blockchain technology, whereby a company will propose and sell a token which determines rights or benefits of an investor such as profit sharing from a project or the rights to acquire a specific goods or service, and will require the investor who intends to invest to be able to participate by bringing a cryptocurrency or money to exchange for a token issued by the company. The rights are determined and enforced by smart contracts on the Blockchain technology. ICO may not be a stock nor a debt. While ICO has a similar name to IPO (Initial Public Offering), it can have a very different essence. A token holder from ICO investment may not own a company like an IPO shareholder and may not be a creditor of the company and may not have property rights of the company in the event of the company close down or bankruptcy, but the token holder will have the rights as specified in a white paper.

  • Blockchain is a decentralized database system with a mechanism which allows a transaction without an intermediary. If it is the public Blockchain, anyone can participate in a verification of the transaction and access to data on the Blockchain. Any transaction recorded on the Blockchain is difficult to edit, modify or destroy. Therefore, this is a high transparency and safety system.

Person Involved in the Sale of Digital Tokens to the General Public


ICO Issuer


An ICO issuer must be a limited company or public limited company with Thai nationality only. The issuer who seeks funding to develop a new project has to issue his/her own token in exchange for a cryptocurrency which will be used to develop a system. This token can be used in the project as determined by the issuer. An Investor should, therefore, carefully and thoroughly study rights to be granted, and the project that the company will undertake may be just an idea and may use a technology that has never existed before. Hence, there is a very high risk that the project will not be successful. The issuance of the token is beneficial for building an ecosystem of the project, but not all businesses are suitable for this ICO fundraising.


However, the ICO issuer must first obtain a permission from the Securities and Exchange Commission (SEC) by submitting a statement of sale of the digital token and a draft of prospectus first. Once approved, the ICO may be offered for sale but must be offered through ICO Portal only. The offering for sale can be offered to the investor in accordance with the types and conditions specified by the SEC.


The ICO issuer is obliged to prepare a report on his/her operation and financial standing. This includes disclosing data that may affect benefits of a digital token holder, investment decisions, or price or value of the digital token with the SEC and the general public as well.


In addition, if the SEC finds that any ICO issuer makes a false statement, reports inaccurate data or not proceed in accordance with such statement or prospectus, the SEC has the power to suspend or revoke such permission immediately. However, such revocation has no retroactive effect on the ICO which has been issued.

ICO Portal

ICO Portal or a provider of a digital token offering system will perform two main duties:


  1. To screen an ICO to be offered for sale to an investor in order to reduce a chance of scams which acts as a financial advisor on studying a company’s data and data of sale of a digital token (due diligence); to screen a project, a business plan, a correctness, clarity and completeness of data in a white paper; to verify whether a smart contract (a condition or covenant of a contract which is written and stored in a form of code on the Blockchain -- if it meets the agreed condition, a contract obligation is enforced automatically) disclosed on a website is in accordance with the white paper; and to explain to the SEC and the investor when a token issuer fails to act in accordance with the data , to spend money in accordance with the purpose of fundraising, or to comply with a condition of a permission if such event occurs during 1 year after a statement has become effective.

  2. To be an ICO sale offering channel by getting to know an identity of the investor (Know Your Customer - KYC) and to consider a suitability of an investment (suitability) of a retail investor, to insure that the retail investor does not invest more than the specified criteria and keep assets of the investor. The ICO Portal must meet the criteria of the SEC and be approved by the SEC.

Digital Assets Business

  • Digital assets exchange center (Exchange) is a center or network for trading or exchanging digital assets (cryptocurrency/token) by matching or finding a partner, or organizing a system, or facilitating those who intend to buy, sell or exchange cryptocurrency/token to be able to make an agreement or to be matched provided that it must be conducted in a normal course of trade.

  • Digital assets broker (Broker) is a service provider, broker or agent to buy, sell or exchange digital assets (cryptocurrency / token) to others in a normal course of trade. By making an order to a digital assets exchange or a digital assets dealer.

  • Digital assets dealer (dealer) is a service provider or is ready to provide a service of trading or exchanging digital assets in his/her name in a normal course of trade by acting outside a digital assets exchange center.

An intermediary which is granted a license by the SEC has to know an identity of a customer (Know Your Customer (KYC), to assess a suitability of an customer's investment (suitability test) as well as to inform a condition for providing a service, a contact channel, a customer's rights and obligation to the customer, to comply with the criteria as prescribed by the law such as risk management, and cybersecurity, etc.


Preventing the Use of Digital Assets to Support Illegal Transactions


An offeror of a digital token for sale who will receive a cryptocurrency in return or a digital assets business operator who will receive the cryptocurrency from a customer in a transaction can only accept the cryptocurrency obtained from trading, exchanging, or depositing with the digital assets business operator as prescribed by the law in order to prevent the use of the cryptocurrency from an unclear source for the transaction.

Additionally, the digital assets operator and the digital token offering service provider are also designated as a financial institution under the Anti-Money Laundering Act. Such operator and service provider have the duty to ensure that digital assets are not used as a means of money laundering.


Preventing Unfair Exchange of Digital Assets


In order to ensure that a trading or exchange of digital assets in a digital asset exchange center is fair, transparent and efficient which will create a credibility and will protect an investor. The law, therefore, constitutes an offense for the unfair trading or exchange of the digital assets in the digital assets exchange center, in the same way as the laws on unfair securities trading practices; for example,

  • A notification dissemination or disclosure of false or misleading data (false dissemination), that is, forbidding a notification, dissemination or certification of a false statement or a statement which may cause material misunderstanding about a financial standing, an operational result or any other data regarding an offeror of a digital token for sale. A nature or essence of the digital token or price for purchase and sale of digital assets in any way which is likely to affect price of the digital assets or a decision to invest in the digital assets.

  • A prohibition of analysis or speculation of a financial standing, an operational result or any other data regarding an offeror of a digital token for sale, a nature or essence of a digital token or price for a purchase or sale of digital assets by using data that is known to be false or incomplete which may cause material misunderstanding by analyzing or speculating or neglecting to consider the accuracy of such data or by distortion of data used in the analysis or speculation and disclosing or commenting on such analysis or speculation to the general public in a manner likely to affect prices of the digital assets or decision to invest in the digital assets.

  • A use of insider data (insider trading), that is, forbidding anyone who knows or possesses the inside data about on an offeror of a digital token for sale, a nature or essence of the digital token to purchase (1) to buy or sell the digital token or to enter into an obligation by a future trading contract relating to the digital token; or (2) to disclose the inside data to other persons, knowing or should know that a recipient may use such data to purchase or sell the digital token or to enter into the obligation by the future trading contract relating to the digital token.

  • A front-running trading (front running), that is, prohibiting a digital assets business operator classified as, a digital assets broker including his/her officials or employees who know or possess data on a purchase or sale of digital assets or a future trading contract relating to the digital assets of any customer of such business operator, to do the following acts in a manner that will be disadvantageous to such customer: (1) to send, modify or cancel an order for purchasing or selling by taking an opportunity before he/she can complete such customer's order or (2) to disclose data on such customer to another person, knowing or should know that such person can made use of the data to send, modify or cancel s for purchasing order or selling before he/she can complete such customer's order.

  • A manipulation of price from a normal market condition (market manipulation), that is, a prohibition of sending an order for purchasing or selling digital assets or purchasing or selling the digital assets which misleads the general public relating to price or volume of the purchase or sale of the digital assets; or (2) doing so in a consecutively manner aims at causing the digital assets price or the volume of purchase or sale to be deviated from the normal market condition. Or a prohibition of submitting, modifying, or canceling digital assets orders or selling digital assets into a digital assets trading system of a digital assets exchange knowing or should know that such act may cause the digital asset price or the volumes of purchase or sale to deviate from a normal market condition and may cause the digital assets trading system to delay or stop.

Penalty Provisions

Any acts which violates or fails to comply with the provisions of this law has criminal penalties. The offenses and penalties are comparable to the securities and exchange law, such as unauthorized offering of digital tokens, conducting business without permission, violation or failure to follow the specified guidelines on offenses relating to unfair acts, offenses against competent officials, liabilities of a managing director or a person responsible for an operation of a juristic person. In addition, civil penalty measures are enforced to make a law enforcement more effective as well.

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