The SEC warned that failure to obtain a licence for the issuance of digital tokens on DeFi platforms could be punishable under the Digital Assets Act.
Thailand’s SEC (Securities and Exchange Commission) has made its first official announcement about DeFi (decentralised finance) platforms, saying they may be subject to licensing requirements under the law.
DeFi is a blockchain-based form of finance that does not rely on centralised financial intermediaries such as brokerages, exchanges, or banks to offer financial services such as lending, borrowing and trading. Some form of tokens are typically issued to those transacting on a DeFi platform.
In a notice issued Monday (30 May), the SEC said the provisions of the Digital Assets Act require the issuance of digital tokens to be authorised and overseen by the securities regulator, and issued through licensed platforms.
The Act requires digital asset businesses to be licensed by the MOF (Minister of Finance), and to “comply with the rules, procedures and conditions of conducting business according to the type of permitted business.”
The SEC warned that a failure to obtain a licence for the issuance of digital tokens or to operate a digital asset business is punishable under the Digital Assets Act, indicating that it may be preparing to regulate DeFi platforms in the future.
According to local reports, the warning was prompted by the launch of DeFi farming platform known as Tuktuk Finance, whose native token (TUK) rose to several hundred US dollars before collapsing to USD within a few minutes.
DeFi platforms have proven to be challenging for regulators as they rely on blockchain-based decentralisation, using smart contracts instead of traditional financial intermediaries, where their developers are often anonymous.