The Securities and Exchange Commission (SEC) is warning investors that Binance, an international cryptocurrency exchange based in Malta that accepts Thai baht deposits, is illegal in Thailand and calls on the company to open dialogue with the regulator.
“We [SEC] would like to inform that Binance is not yet a licensed digital asset operator under the Digital Asset Business Decree BE 2561 . People and investors must use caution if persuaded to exchange digital assets, accept deposits, transfer, withdraw funds or conduct digital asset transactions,” said the statement.
Archinee Pattamasukhon, SEC’s assistant secretary-general, said the SEC has sent a letter to Binance and relevant parties to clarify some information about the company.
According to Poramin Insom, the founder of licensed digital asset exchange platform SatangPro, from a competitive standpoint, the SEC’s action is better than nothing, because the regulator has the responsibility to ensure all platforms comply to existing regulatory frameworks and protect the interests of local exchange platforms which it had granted licences to.
That said, he said he was unsure how Binance will respond to SEC’s letter.
Binance is well-known among Thai cryptocurrency traders, many of whom have active trading accounts on the exchange, but there may not be enough of them to incentivise the platform to apply for a licence in Thailand — unlike in the US, where Binance’s operations are regulated by the US’ SEC.
“US customers account for around 30% of Binance’s total customers. Their business in Thailand may not be significant enough for the exchange to participate,” said Mr Poramin.
“If Binance comes to Thailand, crypto traders in Thailand will have more choices. It would set a new standard of customer service and existing local digital asset exchanges must adapt to compete,” he said.
Mr Poramin said advanced technology is not the only key for a digital asset exchanges’ success, but also the quality of their human resources.
He cited Huobi — a digital asset exchange which was ordered by the SEC to temporarily close its platform last week — as an example of a global player whose human resources failed to meet to the SEC’s requirements.
Mr Poramin said digital asset exchanges have had to shoulder many additional burdens in order to meet the regulator’s requirements, such as carrying out suitability test — which he noted Binance has never conducted — and making sure know-your-customer (KYC) standards meets the requirement set by the Anti-Money Laundering Office.
Investors can check the list of licensed exchanges at www.sec.or.th.