Thailand’s Securities and Exchange Commission (SEC) has banned crypto companies from offering staking and lending services, according to a press release on Thursday. The press release further stated that the decision to ban “depository services” which includes paying returns to depositors, was made to protect traders from the risks associated with crypto lenders.
The Securities and Exchange Commission of Thailand is preparing to take radical measures in the aftermath of the summer’s crypto lending platforms crashes. Several crypto lenders including Celsius Network and Babel Finance, as well as exchanges offering lending services, froze withdrawals over the past few months following a downturn in the crypto market, with Bitcoin and ether losing over 50% of their value since the turn of the year.
One of the troubled exchanges that halted withdrawals is Zipmex, which has entities in Singapore, Thailand, Australia, and Indonesia. The Thai SEC filed a police complaint against Zipmex last week after the exchange failed to provide transactional information before the deadline. The regulator also asked Zipmex to provide clarity on the withdrawal freeze which happened in July.
This announcement from Thailand SEC is closely followed by the recent shake-ups in the crypto industry, including the looming arrest of Terraform Labs founder Do Kwon after his company suffered a massive US$40 billion crash of the company’s Terra ecosystem.
This sent out a shock wave that crashed more crypto firms globally including Three Arrows Capital, Vauld, and Hodlnaut. Thailand’s ban also follows crypto exchange Huobi exiting the country after its license to operate was revoked by the SEC.