Thailand SEC’s new regulation for crypto custodians requires contingency plan

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The Secu­ri­ties and Exchange Com­mis­sion (SEC) of Thai­land has issued reg­u­la­tions for cus­to­di­ans with­in the cryp­to space oper­at­ing in the jurisdiction.

The new rules require dig­i­tal asset busi­ness oper­a­tors that pro­vide cus­tody of clients’ dig­i­tal assets to estab­lish a dig­i­tal wal­let man­age­ment sys­tem to accom­mo­date effi­cient cus­tody of dig­i­tal assets and keys and ensure safe­ty of clients’ assets.

As “keys”, the reg­u­la­tor means a cryp­to­graph­ic key or any oth­er data that must be kept con­fi­den­tial in order to be used for approval of trans­fers or trans­ac­tions relat­ed to dig­i­tal assets in dig­i­tal wallets.

Risk management, digital wallets, keys, and contingency plan

The Thai SEC’s new reg­u­la­tions have tak­en effect since 16 Jan­u­ary 2023. Dig­i­tal asset busi­ness oper­a­tors who had pro­vid­ed cus­tody of clients’ assets pri­or to the effec­tive date of the reg­u­la­tions are required to ful­ly com­ply with­in six months from the effec­tive date.

The reg­u­la­tions cov­er the fol­low­ing requirements:

  •  Pol­i­cy and guide­lines for over­see­ing risk man­age­ment and man­age­ment of dig­i­tal wal­lets and keys as well as com­mu­ni­ca­tion to clar­i­fy such pol­i­cy, action plans and pro­ce­dures, work super­vi­sion and inter­nal con­trol to ensure com­pli­ance with the policy;
  • Pol­i­cy and pro­ce­dures for design­ing, devel­op­ing and man­ag­ing dig­i­tal wal­lets as well as cre­at­ing, main­tain­ing and access­ing keys or oth­er relat­ed infor­ma­tion appro­pri­ate­ly, secure­ly and safely;
  • Con­tin­gency plan in case of occur­rence of any event that may affect the man­age­ment sys­tem of dig­i­tal wal­lets and keys. This includes lay­ing out and test­ing action pro­ce­dures, des­ig­nat­ing respon­si­ble per­sons and report­ing the event. An audit of sys­tem secu­ri­ty is also required as well as dig­i­tal foren­sic inves­ti­ga­tion in case of any event affect­ing the secu­ri­ty of sys­tems relat­ed to dig­i­tal asset cus­tody, which could cause sig­nif­i­cant impacts on clients’ assets.

Thai SEC launches free online courses about crypto

Ear­li­er this month, the Thai reg­u­la­tor launched the “SEC Cryp­to Acad­e­my“, an online chan­nel for the pub­lic to learn fun­da­men­tal knowl­edge on dig­i­tal assets, gain a bet­ter under­stand­ing of risks relat­ed to dig­i­tal assets, build a self-pro­tec­tion mech­a­nism, and keep abreast of frauds and scams on dig­i­tal asset investments.

Free of charge, the main “SEC Cryp­to Acad­e­my” Cours­es include:

(1) Intro­duc­tion for begin­ners: Intro­duc­ing fun­da­men­tal knowl­edge and cor­rect under­stand­ing of the over­all dig­i­tal asset world,

(2) Dig­i­tal Assets Fun­da­men­tals: Lay­ing down the for­ma­tive back­grounds and mech­a­nisms crit­i­cal to blockchain technology,

(3) the Past, the Present and the Future of Dig­i­tal Assets: Recit­ing major time­lines in the past and the turn­ing points in the dig­i­tal asset world, dig­i­tal tokens, NFT, Meta­verse and per­spec­tives on future dig­i­tal asset mar­kets, and

(4) Invest­ment Mind­set and Strate­gies: Build­ing a pos­i­tive mind­set and atti­tudes towards dig­i­tal asset invest­ment to reduce risks as well as intro­duc­ing the use of basic tools for tech­ni­cal analysis.

Once com­plet­ing all cours­es, the learn­ers will be invit­ed to take the Cryp­to Quo­tient (CQ) Test to check the lev­el of their readi­ness for enter­ing the world of dig­i­tal assets investment.

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