The SEC announced the Draft Notification regarding the retention of customer’s assets
Financial
On 23 August 2021, the SEC prepared a draft of the Notification regarding the business conduct including the retention of customer’s assets in order to enhance the supervision of digital asset operators which is currently in the draft process.
The draft Notification of the SEC on Rules, Conditions and Procedures for Undertaking Digital Asset Business (the “Draft”) provides additional rules concerning the retention of customer’s assets which require business operators to follow.
1. The retention of customer’s money
- Current rules: it must be separate from the money of the business operator and to be deposited with a commercial bank or other banks established by specific laws which must be clearly stated in the deposit account as action is taken by a business operator for the benefit of customers
- Additional rules: imposing a withdrawal or transfer of money in the account opened for the benefit of the customer to be in line with the principle of decentralization, multi-signing and check and balance.
2. The retention of customer’s money and digital assets
- Prohibiting the use of assets of one customer for the benefit of another customer.
- Requiring customer’s assets to be reviewed between the accounts created and the assets held for accuracy and up to date in every business day.
3. Using customer’s assets to procure benefits
- Prohibiting the use of the customer’s money to procure profit by any other method than depositing it at a commercial bank. However, it can be negotiated on the interest rate with the customer not exceeding the rate actually received from the commercial bank.
- Prohibiting the use of the customer’s digital assets. This includes lending the customer’s digital assets to other persons.
The Draft also requires the person who withdraws or transfers money in the account of 50 million baht or more to submit the following documents:
- evidence showing that the customer has requested a withdrawal/transfer; and
- Evidence of approval of the request for withdrawal or transfer of money according to the business operator’s procedures.
In this regard, the business operator must comply with the aforementioned rules within 1 month from the effective date of the amended notification (its publication date in the Royal Gazette).
Legal Insight Vol. August 2021 of Bangkok Global Law
The PDF file can be downloaded via the link as set below.