Thai SEC believes that new rules will help protect investor assets.
Thailand’s Securities and Exchange Commission (SEC), the capital market supervisory agency, has introduced new rules for crypto custody service providers.
According to the announcement shared by the Thai SEC, the new rules will help ensure the safety of investor assets and “accommodate efficient custody of digital assets and keys.”
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The rules target virtual asset service providers (VASP) or crypto custodians offering crypto storage services. The new regulations order VASP and crypto custodians to launch digital asset management systems that help custodians to guarantee efficient services.
In the announcement, Thailand’s SEC distinguished three main requirements.
The regulators noted that crypto custodians should get familiar with “policy and guidelines for overseeing risk management and management of digital wallets and keys.”
Moreover, the Thai SEC noted that if custodians have any questions regarding the matter, they should contact the regulator and “clarify such policy, action plans and procedures, work supervision and internal control to ensure compliance with the policy.”
The Securities and Exchange Commission requested crypto custodians and VASP to provide policies and procedures ensuring the safe, secure and appropriate design, development and management of digital wallets.
Lastly, the Thai SEC ordered custody service providers to create a “contingency plan,” which would come into effect in case of unforeseen events that could impact wallet management systems. On top of that, the SEC asked companies to conduct “an audit of system security.”
An audit of system security is also required as well as digital forensic investigation in case of any event affecting the security of systems related to digital asset custody, which could cause significant impacts on clients’ assets.
The regulations came into effect on January 16th 2023. Digital assets custody service providers have six months to comply with the newly imposed rules.
It is worth noting that the new regulations come as no surprise. In December, the Thai SEC revealed that it was planning to strengthen its crypto regulations to “mirror the global market" and "increase investor protection."