Digital asset licences issued
Four companies get nod from ministry
- 9 Jan 2019 at 04:00
- WRITER: DARANA CHUDASRI
Four digital asset businesses received operating licences from the Finance Ministry.
The Finance Ministry has authorised operating licences for four digital asset businesses and denied licences for two businesses seeking to become authorised exchanges.
The three businesses approved as authorised digital asset exchanges are Bitcoin Co (bx.in.th), Bitkub Online Co Ltd (bitkub.com) and Satang Corporation Co Ltd (satang.pro), while Coins TH Co Ltd (coins.co.th) has been approved as a licensed broker and dealer of cryptocurrencies, according to a statement by the Securities and Exchange Commission (SEC).
Cash2Coins Co Ltd (cash2coins.com) and Southeast Asia Digital Exchange Co Ltd (seadex.io) were denied licences for digital asset exchanges because their asset maintenance system and the electronic Know Your Customer system did not meet the SEC's standards, the regulator said.
Both companies failed to demonstrate that their IT security and cybersecurity were adequate, the SEC said.
The royal decree on digital assets has been effective since last May.
The SEC is tasked with regulating initial coin offerings (ICOs) and other digital asset businesses, including digital exchanges, brokers and dealers involved with digital asset transactions.
The Finance Ministry has the authority to issue operating licences for businesses seeking to operate digital asset businesses.
Earlier, SEC secretary-general Rapee Sucharitakul said a certified ICO portal was likely to emerge in November, with the first authorised ICO possibly occurring in December.
Cash2Coins and Southeast Asia Digital Exchange will have to terminate their business operations because they lack authorised operating licences, but the Finance Ministry has allowed the companies to continue business operations until Jan 14 to notify customers about digital asset transfers or transfer customers' holding of digital assets to other digital asset exchanges.
The companies will have to report to the SEC the transferred or returned digital assets.
But these companies are not barred from applying for an operating licence in the future when their systems are ready, the SEC said.
The Finance Ministry is also in the process of assessing a request by Coin Asset Co (coinasset.co.th) to become a licensed digital asset exchange.
There has been a change in the company's management, which has an important implication for licence approval, the SEC said.
Coin Asset can continue operating under the transitional provision of the digital asset royal decree.
Jirayut Srupsrisopa, co-founder and chief executive of Bitkub Capital Holdings, said the government's approval of digital asset exchange licences signifies that cryptocurrencies and blockchain technology are certified by law, which will unlock institutional investment in cryptocurrencies.
The legal status of the digital asset class will attract capital flows from traditional capital market channels into digital asset exchanges, Mr Jirayut said.
"Investors in cryptocurrencies are mostly retail, but since this business is not illegal I expect institutional investors will own the majority of shares in the future, similar to the traditional capital market," he said.
Bitkub plans to partner with two securities firms to help investors transition from the traditional capital market to the virtual investment realm.
The company also plans to partner with an e-wallet company to prepare an alternative payment channel for customers.
"The cryptocurrency market can grow by 10 times in the next 2-3 years from US$100 billion to $1 trillion (3.21 trillion to 321 trillion baht)," Mr Jirayut said. "The size is tiny compared with global stock markets, which have a combined value of $70 trillion."