Ever since digital artist Beeple sold an NFT, or non-fungible token, for USD 69 million at auction house Christie’s in March, the technology has left a deep imprint in Asia. In Thailand, conglomerate Jay Mart Group announced plans to launch the country’s first NFTs, the Bangkok Post reported on Monday, but new regulations might hamper those developments.
Jay Mart’s proposed tokens will showcase “unique moments” of nine celebrities, such as the first concert of Thai-Belgian pop singer Eve Pancharoen, who is known as Palmy, or the first gig of stand-up comedian Udom Taepanich, also known as Note. NFTs are unique digital assets on the Ethereum blockchain that have become a new medium for artists to sell their work.
Thailand’s Securities and Exchange Commission soon dashed creators’ hopes to have the tokens listed on regulated digital asset exchanges, as it announced last Friday a ban on local exchanges to list or trade meme coins defined as “having no clear objective or substance or underlying” purpose, fan-based coins that are tokenized in tandem with the fame of influencers, and non-fungible tokens.
Sanjay Popli, CEO of consulting firm Cryptomind, believes that investor protection is the main motive behind the decision. “The SEC is afraid of pump-and-dump schemes that could affect retail buyers and potentially cause damage to their investments,” he said.
The new rule, effective from June 11, mandates that local exchanges comply within 30 days. However, it does not affect coins that have already been listed on local exchanges, such as ZMT and KUB tokens. This creates an unfair advantage since other regulated exchanges cannot issue any more native tokens or list meme coins such as dogecoin, said Popli.
Industry insiders have criticized the move. On Tuesday, the Thailand Digital Asset Operators Trade Association, or TDO, told the Bangkok Post that it is demanding the SEC reverse the ban.
Popli further argued that regulatory risk has become a concern. “The SEC did not conduct a public hearing with license holders or people within the industry,” he said. “This means that the SEC can clamp down and come up with more stringent regulation in the future, posing greater business risk.” The move might deter global players from entering the market and push local businesses to set up their operations abroad.
The news comes one month after the SEC enacted regulations that prohibit online registrations for cryptocurrency accounts. The new rules that come into effect in September require users to submit identification documents in person, much like when they open a bank account.
SET-listed Jay Mart said on Tuesday that its NFT launch will go ahead as planned this week and that the listing will be on foreign exchanges. It will still allow locals to invest and trade the tokens.
Thai users are heading to global platforms such as Binance or FTX, which offer a wider variety of cryptocurrencies, Popli said. The new regulations mean they have fewer options to choose from on local exchanges.
Thais have embraced decentralized digital currencies, lifting trading volumes on crypto exchanges to USD 2.5 billion in 2020, according to a report released by the Bank of Thailand in April.