Regulation

Financial regulators in Thailand are preparing to tighten restrictions surrounding new account creation at crypto asset exchanges.

According to a May 3 report from Bangkok Post, the country’s Anti-Money Laundering Office (AMLO) announced that as of July, crypto exchanges must verify the identities of new customers in-person using a “dip-chip” machine.

While new users can currently verify their identities with crypto exchanges by submitting documents online, the dip-chip machines will scan a chip embedded in Thai citizen ID cards, requiring customers to be physically present for the verification process. The new rules may also prevent foreign investors — who are unable to obtain Thai ID cards — from accessing exchanges in the country.

Lawmakers also appear keen to apply the same regulations for gold sales worth more than 100,000 THB (roughly $3,200). Some gold merchants located in the country’s capital, Bangkok, already use dip-chip machines for identity verification.

The tightening of regulations comes as crypto assets are surging in popularity in Thailand, with the number of accounts with Thai crypto exchanges spiking from 160,000 at the end of 2020 to nearly 700,000 at the start of May. Industry executives have expressed concerns the new rules will stifle the growth of Thailand’s crypto sector. Poramin Insom, co-founder and director of Thai crypto exchange Satang Corp, stated:

“Most digital asset exchanges are still busy preparing their systems to accommodate the growing number of clients as new account applications continue to flow in. However, this growth may be curbed if the application process becomes more complicated.”

The Thailand Digital Asset Operators Trade Association is planning to host a debate regarding the incoming regulations at an upcoming forum, enabling dialogue with regulatory agencies including the Securities and Exchange Commission and AMLO.

Bitkub, Thailand’s largest exchange which was temporarily suspended by the SEC in January, declined to comment on the new KYC requirements, stating that the new rules had not been officially implemented yet.

In mid-March, the central bank outlawed the use of a stablecoin pegged to the Thai Baht.