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Thai SEC has taken steps to ensure that investors are properly protected from the risks associated with crypto lenders.
Like most global regulators, Thai Securities and Exchange Commission (SEC) is creating measures to check the operations of crypto firms. In its latest action, the agency has decided to ban crypto firms from offering staking and lending services.
According to the Thursday press release, the decision is in line with the regulator’s efforts to ensure that investors are properly protected from the risks associated with crypto lenders.
Per the Thai SEC, crypto firms may no longer take deposits of digital assets from investors, only to use the same assets to borrow and invest before giving depositors their gains.
The regulator also prohibits all forms of advertisement that may encourage staking or lending services in any way.
Why Thai SEC Banned Staking and Lending Services
It is worth noting that the ban appears to be in line with the recent troubles of crypto lenders. Of late, several crypto lenders, most notably Celsius Network, have had to file for bankruptcy as a result of the crypto market downturn. But that is not before freezing withdrawals and transfers on their platforms as they sought to navigate the troubling times. Unfortunately for the customers, however, this means that they cannot access their funds.
For this reason, regulators across the globe are taking it upon themselves to save the situation. Although the market downturn is an undeniable fact, some of the so-called lenders and exchanges are also not being entirely transparent with their withdrawal freezes.
In line with that possibility, the regulator recently filed a police report against crypto exchange Zipmex. The police report came after the exchange – which has its entities spread across Asia – froze withdrawals in July. And according to the police report, Thai SEC says the exchange has failed to provide information about its transactions. This was despite being given a deadline to do so. The regulator also asked Zipmex to shed more light on the reason it froze withdrawals back in July.
In all of this, however, Zipmex exchange maintains that it is fully cooperating with regulators. It also says it will stop at nothing to ensure compliance with existing standards and security measures.