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The Thai SEC said the rules were designed to protect consumers and mitigate the risks of scams in the industry.
Financial regulators in Thailand have intensified their crackdown against crypto asset service providers, cautioning them against misleading ads and introducing broker agency (IBA) events that could breach regulatory standards.
Anek Yooyuen, the deputy secretary-general of the Securities and Exchange Commission (SEC) of Thailand, said the agency is concerned about crypto exchanges enticing investors with special offers, potentially leading them into trading activities without fully grasping the risks involved with such investment offerings.
Thai SEC Restricts Exchanges from False Advertising
According to a report from Bangkok Post on Monday, to address this concern, the Thai SEC has mandated that all advertising and sales promotions by these companies must align with the standard measures approved by the regulator.
The exchanges have been mandated to refrain from conveying false, exaggerated, or misleading information on promotional materials to attract customers.
Furthermore, the financial watchdog requires digital asset trading platforms to include appropriate warnings regarding investment risks in all ad campaigns before bringing them to the public.
The move aims to educate investors about the potential pitfalls of crypto trading and urges them to make informed investment decisions based on accepted risks.
Authorities have also imposed restrictions on exchanges, prohibiting them from pressuring customers in their promotional campaigns to decide whether or not to use their services hastily.
Crypto Exchanges Could Face Punishments
Additionally, the SEC has warned that IBAs can only advertise responsible “digital token services” to discourage speculative behavior in the crypto market.
Yooyuen said that violating any of the rules will attract significant punishments in accordance with the law.
“The SEC is asking business operators to strictly comply with the rules and be careful when organizing IBAs, advertising, and sales promotions, following the relevant rules and guidelines. If there is any violation, there will be punishment according to the law,” Yooyuen said.
The Thai SEC said the rules were designed to protect consumers and mitigate the risks of scams in the industry.
Global Regulatory Responses
Meanwhile, Thailand’s recent regulatory actions align with a global trend where financial authorities worldwide are stepping up to safeguard investors from entering crypto trading without sufficient understanding of investment risks.
For instance, in October 2023, the United Kingdom government implemented stringent advertising measures requiring exchanges to secure authorization from the Financial Conduct Authority (FCA) before launching any promotional campaigns.
These regulations mandate transparency, fairness, and the absence of misleading information in advertisements aimed at attracting investors.
The move by the UK authorities followed a surge in illegal crypto ads, with the FCA issuing 450 alerts in 2023 alone.
Similarly, regulators in major crypto markets such as Spain also warned exchanges against deceptive promotions on X (formerly Twitter) in November 2023.
The National Stock Market Commission (CNMV) in Spain cautioned firms to adhere to local advertising laws when promoting cryptocurrencies or face legal consequences.
