In an attempt to provide cryptocurrency investors a higher level of safety, the Securities and Exchange Commission (SEC) of Thailand is hard at work establishing new legislation for bitcoin custody services.
The Thai Securities and Exchange Commission (SEC) published new guidelines on January 17 that require virtual asset service providers (VASPs) to develop a digital wallet management system in order to guarantee the safekeeping of virtual assets.
The new restrictions are aimed at crypto custodians, also known as VASPs, which are companies that provide services linked to the secure storage of cryptocurrency.
The laws require the formulation of policy and guidelines for overseeing the risk management of digital wallets and private keys. These regulations demand for the development of policy and guidelines. In accordance with the rules, this is one of the three major conditions that must be fulfilled.
VASPs are obligated to communicate with authorities about such policies and offer action plans in order to be in compliance with the laws. This is necessary to ensure that VASPs are not breaking the law.
In addition, the SEC asked that cryptocurrency custodians explain their plans and procedures for establishing digital wallets and keys, as well as preserving and managing them.
The authority will also oblige crypto custodians to create backup plans in the event that the wallet management system is interrupted by unplanned incidents. This requirement will come into effect when the authority implements its wallet management system.
The period of time that has been allotted for cryptocurrency custodians to comply with the regulation's requirements is six months, beginning on the day that it enters into effect.
The Securities and Exchange Commission of Thailand's most recent crypto laws are in line with the authority's objectives to enact more stringent crypto restrictions in the wake of industry failures like the collapse of the FTX. These objectives were established in response to the Securities and Exchange Commission of Thailand's efforts to enact more stringent crypto restrictions.
Reports indicate that at the beginning of the month of January, the government opened a new investigation into a local cryptocurrency exchange known as Zipmex. The government is alleged to have stated that the company had been illegally offering services related to the administration of digital asset funds.