The Securities and Exchange Commission (SEC) has amended the regulations on custody of clients’ assets in digital asset businesses, which include keeping custody, withdrawal and transfer of clients’ fiat money, and seeking benefits from clients’ assets, both fiat money and digital assets, for the clients’ interest.
The amended regulations aim to enhance protection for digital asset investors.
(1) Withdrawal or transfer of fiat money from the accounts opened for the benefit of clients shall comply with the principles for decentralized approval authority, multi-sign approval authority, and check and balance. In case of a withdrawal or transfer of fiat money at an amount from 2 million baht to not exceeding 50 million baht, digital asset business operators shall seek approval from two authorized persons.
In case of a withdrawal or transfer at an amount of 50 million baht or more, another independent authorized person is required to check the transaction before executing it for the client. Additionally, the evidentiary documentation of such transaction must be kept ready for retrieval upon the SEC’s request for inspection;
(2) The use of a client’s assets, fiat money and digital assets for the benefit of another client or any other persons shall be prohibited and clients’ assets shall be reconciled every business day to ensure accurate and updated records of clients’ assets; and
(3) Seeking benefits from clients’ fiat money shall be prohibited except in the form of deposit with commercial bank(s). In this regard, digital asset business operators and their clients may agree on an interest rate not exceeding the actual rate the business operators receive from the commercial bank(s). In case of digital assets, seeking benefits for clients shall be prohibited, including in the form of deposit and lending to other persons, except in the form of digital asset investment with licensed digital asset fund managers.
The notification of the amended regulations has been published in the Government Gazette and has become effective since 1 March 2022. The transitional provisions thereof allow digital asset business operators a period of three to six months to improve and develop necessary work systems in compliance with the governing regulations.