SEC Beefs Up ICO Regulation to Protect Investors and Ensure Transparency

The Securities and Exchange Commission (SEC) has revised regulations for ICO governance and advertising in Thailand. Key amendments include check and balance mechanisms, token holder resolutions, and advertising compliance. These changes aim to enhance investor confidence and ensure transparency and accountability in ICO projects.

SEC Augments Regulatory Framework for Initial Coin Offerings (ICOs)

Bangkok, Thailand - The Securities and Exchange Commission (SEC) of Thailand has implemented significant amendments to regulations governing the governance and advertising of Initial Coin Offerings (ICOs) to bolster investor confidence and ensure the provision of essential information. These amendments, which became effective on April 16, 2024, address key areas such as check and balance mechanisms, token holder resolutions, and advertising compliance.

ICO Governance Enhancements

In line with its mandate to protect investors and promote market integrity, the SEC has implemented a robust set of regulations pertaining to ICO governance. These regulations aim to establish clear accountability and responsibility within ICO issuers, safeguarding the interests of digital token holders.

Check and Balance Mechanisms

To prevent conflicts of interest and protect the rights of token holders, ICO issuers are now obligated to implement effective check and balance mechanisms. These mechanisms, which must be explicitly outlined in ICO filings, empower the board of directors to oversee critical decision-making, including the disclosure of information related to ICO projects.

Token Holder Resolutions

The SEC has revised regulations governing token holder resolutions and associated procedures to ensure transparency and accountability. New rules outline the methods and reasons for seeking votes from token holders, determining vote outcomes, and organizing token holder meetings. These measures align with similar requirements imposed on real estate-backed tokens, enhancing investor protection.

ICO Advertising Regulations

To combat misleading or exaggerated claims, the SEC has imposed stringent advertising regulations for ICOs. Advertisements must refrain from enticing or coercing investors into making hasty investment decisions. Furthermore, they must not imply guaranteed returns and must include appropriate warnings about the inherent risks associated with ICO investments.

When using external information, the SEC mandates that advertisements clearly specify reliable sources. All advertising materials must also comply with relevant requirements governing marketing promotions and the deductibility of advertising expenses. Additionally, ICO issuers are responsible for ensuring that third-party advertisers adhere to these regulations.

Non-compliance with advertising requirements may result in the SEC directing ICO issuers to revise advertisement content to ensure the provision of accurate, comprehensive, and factual information that does not mislead investors.

Effective Date and Publication

The notification specifying the amended regulations has been published in the Government Gazette and is effective as of April 16, 2024. The amendments represent a significant step forward in the SEC's efforts to create a transparent and well-regulated environment for ICOs in Thailand.

By enhancing governance practices, ensuring token holder involvement, and mitigating advertising risks, the SEC aims to foster investor confidence and support the responsible growth of the ICO market.