Thailand SEC Proposes Rules for Utility Token Issuance by Exchanges

The Thailand Securities and Exchange Commission (SEC) has opened a consultation period for feedback on proposed rules that would permit exchanges or their affiliated entities to issue utility tokens. This initiative is part of Thailand's broader efforts to establish a comprehensive regulatory framework for the crypto industry. The consultation period, which began this week, will accept feedback from citizens, businesses, and stakeholders until July 21. Opinions can be submitted through the SEC’s official website, Thailand’s central legal system platform, or via email.

Under the proposed rules, exchanges would be required to disclose the names of individuals associated with the token issuers. This measure is designed to assist the SEC in monitoring for signs of insider trading, a practice that has been a concern in the crypto industry. The plan follows several significant policy shifts in Thailand, including the government's decision to waive capital gains tax on crypto profits earned via licensed platforms. This tax exemption, which took effect on January 1, will run through December 31, 2029.

Thailand has a history of dealing with crypto-related issues. In 2022, the SEC alleged that the chief technology officer of Bitkub, one of the largest exchanges in the country, used insider information to purchase certain tokens ahead of a major deal. This incident highlighted the need for stricter regulations and oversight in the crypto market. The proposed amendments aim to address these concerns by mandating greater disclosure from exchanges and ensuring stricter investor protections.

The new framework also requires exchanges to reveal the identities of individuals connected to the issuers of listed digital tokens. This information will be flagged using alert symbols within the SEC’s electronic reporting system to enhance oversight and reduce risks of insider trading. Existing listed tokens will not be exempt from these new disclosure requirements. Exchanges must ensure that token issuers disclose all related parties within 90 days of the announcement’s effective date.

This regulatory overhaul aligns with Thailand’s vision to establish itself as a global digital asset hub, balancing innovation with investor protection. The SEC’s call for feedback comes amid heightened enforcement activity. Beginning June 28, the commission, working under the Ministry of Digital Economy and Society, will block access to five unauthorized crypto exchanges: Bybit, 1000X, CoinEx, OKX, and XT.COM. These platforms have been accused of offering trading services to Thai residents without obtaining the necessary licenses. This enforcement action underscores the SEC’s commitment to ensuring that all crypto activities within the region comply with regulatory standards.