Thailand SEC’s new regulation for crypto custodians requires contingency plan

The new rules require digital asset business operators that provide custody of clients’ digital assets to establish a digital wallet management system to accommodate efficient custody of digital assets and keys and ensure safety of clients’ assets.

As “keys”, the regulator means a cryptographic key or any other data that must be kept confidential in order to be used for approval of transfers or transactions related to digital assets in digital wallets.

Risk management, digital wallets, keys, and contingency plan

The Thai SEC’s new regulations have taken effect since 16 January 2023. Digital asset business operators who had provided custody of clients’ assets prior to the effective date of the regulations are required to fully comply within six months from the effective date.

The regulations cover the following requirements:

•  Policy and guidelines for overseeing risk management and management of digital wallets and keys as well as communication to clarify such policy, action plans and procedures, work supervision and internal control to ensure compliance with the policy;
• Policy and procedures for designing, developing and managing digital wallets as well as creating, maintaining and accessing keys or other related information appropriately, securely and safely;
• Contingency plan in case of occurrence of any event that may affect the management system of digital wallets and keys. This includes laying out and testing action procedures, designating responsible persons and reporting the event. An audit of system security is also required as well as digital forensic investigation in case of any event affecting the security of systems related to digital asset custody, which could cause significant impacts on clients’ assets.

Thai SEC launches free online courses about crypto

Earlier this month, the Thai regulator launched the “SEC Crypto Academy“, an online channel for the public to learn fundamental knowledge on digital assets, gain a better understanding of risks related to digital assets, build a self-protection mechanism, and keep abreast of frauds and scams on digital asset investments.

Free of charge, the main “SEC Crypto Academy” Courses include:

(1) Introduction for beginners: Introducing fundamental knowledge and correct understanding of the overall digital asset world,

(2) Digital Assets Fundamentals: Laying down the formative backgrounds and mechanisms critical to blockchain technology,

(3) the Past, the Present and the Future of Digital Assets: Reciting major timelines in the past and the turning points in the digital asset world, digital tokens, NFT, Metaverse and perspectives on future digital asset markets, and

(4) Investment Mindset and Strategies: Building a positive mindset and attitudes towards digital asset investment to reduce risks as well as introducing the use of basic tools for technical analysis.

Once completing all courses, the learners will be invited to take the Crypto Quotient (CQ) Test to check the level of their readiness for entering the world of digital assets investment.