19 January 2021
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On November 26, 2020, the Notification of the Ministry of Finance Re: Addition to Other Business Relating to Digital Assets B.E. 2563 (2020) (the Digital Asset Business Notification) and the Notification of the Ministry of Finance Re: Licensing of Digital Asset Business No. 2 B.E. 2563 (2020) (the Digital Asset Business Licensing Notification) were published in the Thai Government Gazette.
Additional Digital Asset Businesses
The new Digital Assets Business Notification adds two new categories of digital assets business to the list prescribed in the Royal Decree on Digital Asset Businesses B.E. 2561 (2018).
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Digital Asset Fund Manager is defined as a person who manages funds from digital assets for another person for benefits, or holds themselves out to the general public as being ready to do so, in the ordinary course of business. It does not include the management of digital assets as prescribed by the Securities and Exchange Commission (SEC).
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Digital Asset Advisory Service is defined as a person who provides consultations to other people, directly or indirectly, regarding the value of digital assets; the suitability of investment in digital assets; or the buying, selling, or exchanging of any digital assets in the ordinary course of business in return for service fees or other compensation. However, this does not include consultations as a part of or relating to a digital asset exchange, digital asset broker, digital asset dealer, digital asset fund manager, or other personal consultation as prescribed by the SEC.
Additional Digital Asset Licensing Requirements
The Digital Asset Business Licensing Notification amends the definition of “License Applicant” to include cryptocurrency exchanges, digital token exchanges, cryptocurrency brokers, digital token brokers, cryptocurrency dealers, digital token dealers, cryptocurrency fund managers, digital token fund managers, cryptocurrency advisory services, and digital token advisory services.
Additional requirements for granting licenses have also been added in the new Digital Asset Business Licensing Notification, including:
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the licensee must never have been denied a license or had a license revoked in the last six months from the date of the application submission;
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the licensee’s application must not be a replacement of a previous application that has been withdraw by the licensee; and,
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the licensee must not currently be under any legal proceedings for any violation of law.
The digital assets business must commence within 180 days after receiving licensing approval.
Digital Asset Fund Managers and Digital Asset Advisory Services already in operation are required to apply for a license from the SEC within 90 days after this Digital Asset Business Licensing Notification comes into force (i.e. by February 25, 2021). Once an application has been filed with the SEC, the applicant is allowed to continue operating their business until the SEC issues an order to decline the application.
The Digital Asset Business Licensing Notification also updates the application fees.
For further information, please contact:
Charuwan Charoonchitsathian, Partner, Tilleke & Gibbins
charuwan.c@tilleke.com
