The Asian country has just approved a draft decree that regulates cryptocurrencies and initial coin offerings (ICOs). This is an important step for crypto-related enterprises located in the country, that will have to obtain licenses and report sensitive information to comply with Anti Money Laundering policies (AML).
Thailand Regulates Cryptocurrencies
According to local media, the Thai cabinet has approved a draft decree that regulates the cryptocurrency market, including ICOs. The main difference with another draft proposed some time ago, is the way in which digital assets are defined.
Finance Minister Apisak Tantivorawong, explained that the changes have been made to cryptocurrencies and digital tokens. Other assets such as electronic data have been removed from the draft. Once it is published in the Royal Gazette, it will become law.
The Bangkok Post explained:
“The new law to comprehensively regulate cryptocurrencies and digital tokens is necessary to prevent money laundering, tax avoidance and crime. The new law is not meant to prohibit cryptocurrencies, Initial Coin Offerings (ICOs) and other digital asset-related translations, but to protect investors.”
At the same time, Mr Apisak explained that the Thai Securities and Exchange Commission (SEC) are working in order to register all the transactions made with cryptocurrencies. That includes exchanges, brokers and dealers. All of them must be registered with the relevant authorities.
Deputy Finance Minister Wisut Srisuphan said that traders will have to pay VAT and other taxes on their earnings.
Mr Srisuphan explained:
“Investors who make digital-asset related trades will be liable for a 7% value-added tax (VAT) payment, on top of the 15% withholding tax on capital gains and returns from such investments, when the new law is enforced. Retail investors will be exempt from paying VAT if they trade digital assets through exchanges.”
Thailand Past Crypto Laws
In the past, cryptocurrency regulations were discussed. The main intention was to ensure that everyone who is connected to the cryptocurrency world is registered with the local authorities. There are several concerns regarding criminal activities, terrorism financing, and money laundering.
Different countries all over the world are starting to impose restrictions and regulations to the ICO and cryptocurrency markets. During the last G-20 financial meeting in Buenos Aires, the most important economies on earth discussed how to regulate these assets.
At the moment, there were no specific regulations, but they recommended to follow FATF standard regulations. In July, the FATF will have to present an inform about the progress made by nation-states and other actors in the market.
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