THAILAND Law and Practice Contributed by: Wongsakrit Khajangson, Panupan Udomsuvannakul, Koraphot Jirachocksubsin and Pitchaya Roongroajsataporn, Chandler Mori Hamada
tion, and such appointment will be valid upon approval by the Office of the SEC. The exchanges are obliged to comply with all guidelines specified by the Office of the SEC, including on source of funds, protection of cus - tomers’ assets, prevention against electronic theft, KYC measures and a reliable account - ing system approved by the SEC. Among other obligations, the operator must segregate the retained customers’ assets from its own assets. Under SEC Notification Re: Rules, Conditions and Procedures for Undertaking a Digital Asset Business (No 11) (the “NFT Regulations” ), digital asset exchanges are obliged to set listing rules to prohibit token issuers from listing utility tokens or certain types of cryptocurrencies that have the following characteristics. • Meme tokens have no clear objective or substance or underlying substance, and their price is based on social media trends. • Fan tokens – tokens dependent on the fame of influencers. • Non-fungible tokens (NFTs) are digital crea - tions that declare ownership or grant rights to an object or other specific right. It is unique and not interchangeable with digital tokens of the same category and type at an equal amount. • Digital tokens that are utilised in a block - chain transaction and issued by digital asset exchanges or related persons. While some types of tokens may be banned from being listed on digital asset exchanges, and the provision of services in relation to such tokens is prohibited, the SEC, in 2024, issued exemptions for certain ready-to-use utility tokens by divid - ing them into two groups and providing specific approaches for each of them as follows:
Group 1 Utility Tokens include ready-to-use tokens: • for acquiring goods or services primarily for consumption, eg, digital vouchers/coupons, concert tickets, event passes, airline tickets, and NFTs representing artworks, music, or videos granting specific rights to the holders. • which serve as digital representations of certificates, like carbon credits, renewable energy certificates, educational transcripts, and medical certificates. These tokens are considered non-financial products traded on specific platforms, and market mechanisms determine their value. Group 2 Utility Tokens are designed for financial services, investment, and speculative purposes, similar to money and capital market products. They include tokens for accessing goods and services on DLT platforms, exchange tokens for paying fees or receiving discounts on digital asset exchanges, governance tokens for voting rights, and tokens for digital asset services in DeFi or CeFi. Group 1 Utility Tokens are exempt from approval for primary market offerings and are not con - sidered regulated businesses, but digital asset exchanges, brokers, and dealers cannot pro - vide services related to these tokens unless they establish a separate entity. Meanwhile, Group 2 Utility Tokens are exempt from approval unless listed on a Sec-authorised digital asset exchange, and digital asset business operators can provide services related to these tokens. In any case, neither group can be used as a means of payment or for staking except for transaction verification, voting, participation in activities, or receiving ecosystem benefits.
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