The Thai Securities and Exchanges Commission (SEC) has successfully come up with a regulatory framework for ICOs, but according to the agency's deputy secretary, some uncertainty still exist on how to group security token offerings (STOs).
The confusion stems from the fact that the Thai SEC has a different framework for Digital Assets (cryptocurrencies) and another for traditionally regulated securities. With STOs regarded as the controlled version of ICOs, the Commission faces a tricky test.
Deputy Secretary, Tipsuda Thavaramara explained the current situation in a BangkokPost report.
“At the moment, we have not decided whether STOs fall under the SEC Act or the Digital Asset Act, but it depends on the STO's conditions and the details in its white paper.”
Tipsuda further explained that there are also issues are about how “share ownership, voting rights, and dividend” is to be distributed in a Security Token Offering (STO).
STOs Fit Under Securities Law and Digital Asset Act
The Thai Digital Asset Act could be fitting for STOs if the project uses the same model as is used for ICOs to issue the tokens.
Meanwhile, in cases where the startup uses the same model as is used for issuing traditional securities, their tokens could fit into the Thai Securities Act.
To solve this problem, the deputy secretary stated that the commission would“have to consider carefully how to respond to each STO."
Whether the agency will later create a separate framework for STOs was not stated in the report. However, a private securities exchange operator in the country, Prinn Panichpakdi, said that “the SEC will have to consider how to deal with this” or risk the possibility of Thai projects going on to “ launch in other markets.”
Launching Thai-related Security Token Offerings (STOs) in an International Market is Wrong
A certain Satang Corporation in the country is already planning to issue an STO next year before going ahead to register their fundraising activity and crypto exchange with the U.S SEC.
Deputy secretary, Tipsuda seemed to suggest that such a move is illegal under the Digital Asset Act.
She acknowledged that it is wrong for a startup to issue security tokens backed by Thai investors to an international audience because such a move will mean that the project is only trying to avoid the regulated traditional fundraising models such as distributing shares or conducting an IPO.
So far, the regulators have not issued any license to ICO operators and may want to solve the mystery surrounding STOs before allowing them to launch in the country.