Thailand Moves to Regulate Crypto Exchanges, Abolishes Capital Gains Tax

Thailand’s Securities and Exchange Commission (SEC) has initiated a public consultation on proposed regulations that would permit exchanges, or individuals associated with them, to issue utility tokens. This move is part of Thailand’s ongoing efforts to develop a comprehensive regulatory framework for the crypto industry. The proposed rules would require crypto exchanges to disclose the identities of individuals involved in token issuance, aiming to curb insider trading and enhance market transparency.

The consultation is a significant step in Thailand’s approach to regulating the crypto market, which has seen both promotional and restrictive measures. In May, the country announced plans to allow tourists to use cryptocurrencies, indicating a growing acceptance of digital assets. However, this was followed by the closure of access to crypto exchanges OKX and Bybit due to concerns over unlicensed activities and money laundering.

In a bold move to attract global crypto investors, Thailand recently abolished capital gains taxes on cryptocurrency sales for a five-year period. This tax exemption, effective from January 1, 2025, to December 31, 2029, aims to position Thailand as a leading global hub for digital assets. The Thai Cabinet approved the tax waiver, which exempts personal income taxes on profits from crypto sales through licensed digital asset service providers. Deputy Finance Minister Julapun Amornvivat described this decision as a crucial step towards Thailand’s vision of becoming a major financial center, potentially drawing crypto firms and investors away from established hubs like Singapore and Dubai.

The government anticipates that the new tax exemption will yield substantial economic benefits, with projections indicating that crypto assets could expand the Thai economy and boost tax revenues by at least 1 billion baht (approximately $30.7 million) over the medium term. Industry analysts suggest that the potential gains could be even higher, given Thailand’s status as the region with the second-largest concentration of crypto holders in Southeast Asia. According to Jagdish Pandya, founder of Blockon Ventures and organizer of Thai Blockchain Week 2019, Thailand’s crypto holders are currently managing $180 billion in assets, and clear regulations and tax reforms could encourage further investment in crypto assets.

The latest regulatory efforts are also influenced by past incidents of insider trading. In 2022, Thailand’s SEC accused the CTO of Bitkub, one of the country’s largest crypto exchanges, of using confidential information to profit from token sales ahead of a major deal. Insider trading, which involves buying or selling securities based on non-public information, is widely considered illegal across financial markets. Globally, enforcement in the crypto space has intensified, with notable cases such as the conviction of OpenSea’s former Head of Product, Nate Chastain, for front-running NFT listings, and the indictment of three former Coinbase employees for leveraging non-public token listing details.

More recently, Binance suspended a staff member in March following an investigation into alleged insider trading, and blockchain analysts have flagged suspicious trading activity related to US President Donald Trump’s memecoin (TRUMP), raising speculation of insider behavior. Thailand’s SEC aims to use the consultation period to gather public input on structuring the issuance of utility tokens and preventing illicit practices in an increasingly complex market. This initiative underscores Thailand’s commitment to fostering a transparent and secure crypto environment, balancing innovation with regulatory oversight to attract global investors and promote economic growth.