By introducing new regulations for cryptocurrency custody services, the Securities and Exchange Commission (SEC) of Thailand hopes to better protect cryptocurrency investors, as reported by Cointelegraph.
According to Cointelegraph, in order to ensure effective custody, the Thai SEC issued regulations on January 17 requiring virtual asset service providers (VASP) to set up a digital wallet management system. The new regulations are directed at VASPs or crypto storage service providers (custodians).
Cointelegraph further noted that three key requirements are listed in the regulations, including the provision of a policy and set of rules for regulating how digital wallets and private keys are managed in terms of risk. According to the regulations, VASPs must inform regulators about such policies and present action plans to guarantee compliance.
The SEC also asked cryptocurrency custodians to submit policies and procedures for creating, developing, and managing digital wallets and keys. The authority will also demand that cryptocurrency custodians create a backup plan in the event that something unexpected happens that might affect the wallet management system, Cointelegraph noted.
Following industry failures like the FTX collapse, Thailand’s SEC has announced new crypto regulations that are in line with its plans to enact stricter crypto regulations.
According to reports, the authority opened a fresh investigation in early January into a local cryptocurrency exchange named Zipmex on the grounds that it was unlicensedly managing digital asset funds, Cointelegraph noted.
(With insights from Cointelegraph)
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