SEC reveals framework for ICO portals and tokens

The Securities and Exchange Commission (SEC) has released a regulatory framework for issuing and selling digital tokens through initial coin offerings (ICOs) along with announcing the ICO portal process, effective from July 16.

Since the digital asset decree stipulates that ICO issuers have to be approved by ICO portals, ICO portals will have to be initially approved by the SEC.

ICO portals must be Thailand-based companies with minimum registered capital of 5 million baht.

ICO portals' management structure and personnel must be adequate for business operations. They are also required to be prepared to evaluate ICO issuers' business plans and the distribution structure of digital tokens as well as perform checks to ensure that computer code, or source code, matches the disclosed information.

Identifying investors' status, identity, and risk-taking ability are also part of ICO portals' responsibility.

The SEC will begin assessing digital token sales of ICO issuers once ICO portals have been approved.

ICO issuers must be companies established under the Thai legal jurisdiction, with clear business plans and clear rights for digital token holders.

Disclosure of source code, investment prospectus, and financial statements are also required.

Each ICO can be offered to ultra-high net worth investors, venture capital firms, and private equity funds at an unlimited amount, but investment is capped at 300,000 baht for retail investors per person and per ICO project, or no more than 70% of total value of offered tokens.

ICO issuers are only permitted to receive payment of issued tokens in baht or seven cryptocurrencies.

"The SEC is pleased to immediately discuss details with those who would like to be approved as ICO portals in order for them to be prepared for the regulatory framework. After the SEC approves an ICO portal, the token will be assessed for approval," said SEC secretary-general Rapee Sucharitakul.

"Despite the regulatory framework's standardisation of ICOs and enhancement of investors' protection against fraud, an approved sale of digital tokens does not guarantee the success, price or return from fund-raising projects. Investors can still experience losses or limited choice in token swaps, so investors should study information thoroughly and accept investment risks before making an investment," said Mr Rapee.