On 1 September 2020, the Thai Securities and Exchange Commission (“SEC”)’s new regulations regarding the advertisements of digital asset business operators became effective. Prior to the issuance, the SEC observed that digital asset business operators heavily advertised their digital asset services on various platforms, such as digital media and billboards. Many of these advertisements were misleading in many respects, such as selectively showing only positive information with no warning on the volatility of digital assets, not clearly displaying such warnings, or not providing sufficient information required to make an investment.

These issues necessitate the new requirements to improve the effectiveness of the supervision of advertising to ensure such advertisements are clear and appropriate and in line with foreign regulations to increase protections for traders. As a result, the SEC has issued the new regulations as below:

• Notifications of the SEC No. GorThor. 19/2565 on Rules, Conditions and Procedures for Undertaking Digital Asset Businesses (No.17);
• Notifications of the SEC No. SorThor. 22/2565 on Rules on Details of Advertisement and Promotion of Digital Asset Business Operators; and
• Guideline Statement of the SEC No. NorPor 5/2565 on Guidelines regarding the Rules on Advertisement of Digital Asset Business Operators.

Under the above mentioned notifications, the key requirements can be summarized as follow:

• The advertisement must not be false, concealing the facts or misleading in material respects.

• Advertisements for cryptocurrencies are limited only to the official channels of the digital asset business operators to prevent high volatility products from reaching a wide range of people and reduce incidents of impulsive buying.

  In this regard, the SEC interprets the official channels of the digital asset business operators as meaning the offline/online channels by which the business operators contact the customers who are interested in using their services, such as their official premises registered with the Department of Business Development, their websites and applications, official online accounts that have been verified by the business operators, the official email accounts of the business operators, or any other channel that the business operators can prove are their official channels, for instance, by proving the fact that the contents of such a channel is under its authority to control or modify. The digital asset business operators may not publish advertisement for cryptocurrencies on the advertisement channels of other persons or their business partners.

  However, advertisements for the services of digital asset business operators (as opposed to cryptocurrencies) may be made via other channels, with some of the guidelines below.

• The number of customers mentioned on the advertisement must only be the customers whose accounts were already approved for trading.

• Digital asset business operators may introduce broker agents only for digital tokens, and no longer for cryptocurrencies.

• The advertisement must contain the minimum information required for making an investment, clearly display the prescribed warnings on investment risks, and provide a balanced view of potential risk and returns.
• The digital asset business operators must submit: (i) the details of the advertisement, (ii) the details of the expenses incurred for the advertisement, and (iii) the details of the hiring of bloggers or influencers, which are defined as individuals who have more than 10,000 followers on any social media channel, to be featured in the advertisement, via e-submission of a checklist form to SEC within the following timeframe:

1. 1. Within 10 days following the interview completion (for an interview); or
   2. At least 10 days prior to the publication of an advertisement that is not an interview. Such advertisements may only by disseminated if the SEC does not have any objection in writing.

• In a case in which digital asset business operators hire any person to prominently feature in an advertisement, such advertisement must clearly display the information of the person who makes the hire (i.e. the business operator) and the relationship between the person who makes the hire and the person featured in the advertisement.
• Digital asset business operators must ensure that its affiliated companies and the persons involved in its digital asset business do not publish any advertisement that could make the public confused or misunderstand that it is an advertisement for a digital asset business operator.

The requirements under the above mentioned regulations became effective from 1 September 2022 onwards, and any advertisements made prior to such date must be amended to comply with such requirements within 30 days of 1 September 2022.

The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.

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