Thai securities regulator SEC Issues Crypto Custody Provider Rules
Thai securities regulator SEC Issues Crypto Custody Provider Rules to protect cryptocurrency investors in case of unforeseen events. Introducing new rules for cryptocurrency custody services is part of Thailand's Securities and Exchange Commission's (SEC) efforts to protect cryptocurrency investors.
Recently SEC published regulations that allow virtual asset service providers (VASP) to build a digital wallet management system to ensure efficient custody. The new regulations focus on crypto custodians or VASPs that offer crypto storage services.
Three important requirements are included in the regulations including the supply of policies and procedures for managing the risk management of digital wallets and private keys. VASPs must communicate to authorities about such policies. They also need to create action plans to ensure compliance, according to the guidelines.
Furthermore, the SEC demanded that cryptocurrency custodians need to disclose plans and procedures for creating, developing, and administering digital wallets and keys.
The government will also compel crypto custodians to develop a backup plan to protect in the event of an unforeseen situation that disrupts the wallet management system. The new regulations will be effective starting from January 16, 2023. Cryptocurrency custodians must completely comply with these new regulations within six months of the effective date.
This includes developing and testing action plans, identifying accountable parties, and reporting the event, according to the SEC.
A system security audit, and a digital forensic investigation, are also necessary in the event of any occurrence that may lead to a compromise the security of systems associated related to digital asset custody, it may have a major effect on their client's wealth.
Recent crypto laws of Thailand's SEC's are consistent with the authority's plans to implement more stringent crypto regulations. A new investigation has been launched against a local crypto exchange Zipmex, alleging that it is providing digital asset fund management services without authority.
CBW - External Analyst