Firms urged to approach digital assets with caution

The Bank of Thailand and the Securities and Exchange Commission (SEC) have warned public and listed companies to take caution when making transactions related to digital assets because of their price volatility and susceptibility to fraud.

The regulators said traders should consider digital assets thoroughly and act cautiously by taking into account both expected interest and potential risks and impacts.

Both regulators issued their announcements on July 8 after public and listed companies began taking an interest in transactions related to digital assets, including through investment, accepting cryptocurrency payments for goods and services, and via initial coin offerings of utility tokens in exchange for listed companies’ goods and services.

Digital asset investments and new payment methods for goods and services have been in the news lately.

The central bank also warned against the use of digital assets as a means of payment for goods and services.

Those paying with as well as those receiving digital assets must accept all risk involved, including risk pertaining to the value of a digital asset, cybertheft, or the misuse of digital assets as a tool to support money laundering.

The regulators asked traders to study certain types of digital assets that are used for investment to understand the associated risks.

“Listed companies in particular have a duty to take into consideration potential benefits compared with potential risks and impacts for the companies,” read the SEC’s statement.

The SEC said this consideration by directors and executives of listed companies is part of their fiduciary duty, which includes a cautious examination of what is in the best interests of the companies.

In the case of digital asset investment, listed firms must also consider the transaction size and the obligation to comply with governing regulations.

“Directors, executives and listed companies should also be careful in disseminating news or information related to companies’ operations that have an impact on stock prices or investors’ decisions — as this could constitute an offence as an unfair act under the SEC Act,” stated the SEC.

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