Investors in Thailand can now trade bitcoin futures listed on the Chicago Mercantile Exchange and the Chicago Board Options Exchange.
The country’s financial authorities say that these instruments should be offered in Thailand and one company is already offering them to their customers.
Phillip Securities Thailand Ltd. announced on Monday the launch of its bitcoin futures trading services for investors wanting to invest in bitcoin futures listed on the Chicago Board Options Exchange (CBOE) and the Chicago Mercantile Exchange (CME), local publications reported.
Apisak Vongvanij, head of global markets at Phillip Securities Thailand, explained that customers “must apply for the company’s global derivatives service,” the Bangkok Post detailed.
This service, launched 6 years ago, allows them to trade futures on 15 global futures markets, including CBOE and CME, Vongvanij continued, adding that “Thais are seen as reasonably active investors.”
The SEC issued the statement on Monday after receiving several enquiries about the trading. It did not name the broker but there were reports earlier that Phillip Securities (Thailand) Plc was to first to offer the service, which began late last year.
The SEC said the derivatives are traded on the Chicago Mercantile Exchange and CBOE Futures Exchange, which are under the supervision of the US Commodity Futures Trading Commission.
“The Thai securities company can offer the product since the markets are under the supervision of the International Organization of Securities Commissions (IOSCO), with which Thailand has an agreement to exchange data,” the statement said.
Since the product is already supervised by qualified regulators, the major concern for Thai traders is not fraud or money laundering.
At issue is the extremely high risk due to the high volatility of the cryptocurrency, which is the underlying asset, and the leverage of the product, which could generate higher or lower profits or losses than the underlying product does.
The SEC said it had instructed the broker to be cautious when selling the service and make sure customers understand and are ready accept the risk.
Also on Monday, the Finance Ministry urged investors to apply caution when investing in bitcoin, especially with companies claiming to do so for them.
Bitcoin traders who persuade others to invest with them might have been violating the law on public fraud, according to the ministry.
Anyone who advertises to a group of 10 people or more he can give returns at rates higher than the maximum offered by financial institutions might be committing public fraud if he knows or should know that he would use the money from some investors to pay others as returns, or is aware he cannot possibly operate legitimately to generate such returns.
Prices are quoted in US dollars and investors have to put money down to cover their investment margin, he noted. “In principle, investors should prepare money as a buffer for price movement around 20-30% above the margin.”