New laws that restrict some digital coins, including Meme currencies such as dogecoin, have been announced by the Thai Securities and Exchange Commission (SEC)
Thailand has issued a limited ban on cryptocurrency trading, focusing on meme currencies and NFTs. The Securities and Exchange Commission (SEC) Board of Directors prohibits digital asset exchanges from offering services related to these tokens.
The Thai SEC’s decision is just the latest in the regulator’s efforts to create a framework for cryptocurrencies in the country. While the regulator does not want to outright prohibit cryptocurrencies, it has taken a protective position to avoid ordinary citizens and even traders from putting their money at risk through crypto investments.
Exchanges were instructed last week to delist the currencies, as well as NFTs, utility tokens, and social tokens, within 30 days. According to the Thai Securities and Exchange Commission, the new laws are intended to safeguard traders against tokens that have “no clear objective or substance” and whose prices are influenced by social media trends and influencers. The law is intended to safeguard the interests of digital asset traders in the nation.
Dogecoin, especially, has seen its online popularity explode as a result of Elon Musk’s remarks. The price of the so-called meme currency has recently changed due to crypto volatility fuelled by prohibitions in China and probable limitations in India. El Salvador, on the other hand, just became the first country to accept Bitcoin as legal cash.
Along with Dogecoin, NFTs (non-fungible tokens) were popular earlier this year. The assets effectively allow one-of-a-kind digital art purchases to be tokenized, functioning as ownership certificates.
The following are no longer permitted to be traded in Thailand, according to the SEC, as of June 11:
- Meme coins, which the SEC described as having no apparent aim, content, or backing, with the price fluctuating based on social media trends. Though not specifically specified, this probably applies to meme-based cryptocurrencies such as dogecoin (DOGE), the price of which has been heavily impacted by celebrities, most notably Tesla CEO Elon Musk.
- NFTs, which were the trendiest sector in crypto for a few brief months this year. They are digital assets that reflect a wide range of one-of-a-kind tangible and intangible goods, ranging from collector sports cards to virtual real estate and even digital shoes. NFTs, unlike other cryptocurrencies, cannot be immediately swapped.
- Fan tokens are digital assets produced based on user preferences.
- Exchange tokens, like those released by Binance (BNB), Uniswap (UNI), and FTX (FTT), provide investors with perks including lower transaction costs on the respective exchange.
Exchanges require 30 days from date of implementation to update their listing guidelines to reflect the new requirements.
Furthermore, the Thai SEC has declared that exchange tokens would be prohibited, according to Decrypt. These are crypto exchange-issued proprietary coinage that may be used to trade and pay fees.
Ledger Insights Takeaway :
According to a Ledger Insights article, the Thai Securities and Exchange Commission enforced modern digital asset advertising laws in response to increased allegations of frauds employing NFTs, meme coins, and fan tokens. Whereas the SEC has not provided a particular justification for the restrictions, the inherent instability of meme currencies and the inflated pricing of NFTs are mentioned as reasons for the prohibitions.
There have been several frauds involving scammers selling bogus NFTs and fan-tokens to naïve investors, which harms the credibility of the crypto sector as a whole. Furthermore, the NFTs market has grown rapidly in the last year, and many analysts feel it is presently tremendously overpriced and in a cocoon. NFTs are digitized artworks whose possession is verified by Non-Fungible Tokens, which function similarly to a blockchain and provide a very safe and secured form of evidence of ownership.
This restriction appears to be a step in the correct approach for protecting investors from the unavoidable dangers that come with investing in overpriced NFTs with no intrinsic use and meme coins with severe price volatility. The Dogecoin prohibition, on the other hand, is sure to enrage many citizens, as Dogecoin is one of the most popular and biggest cryptocurrencies, but everything happens for a reason, hopefully, the best