Thailand Sets the Stage to Legalize and Regulate Cryptocurrencies and ICOs

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In Thailand, there are no laws clearly set to help regulate and legalize cryptocurrency trading, or crowdsale, through initial coin offerings (ICOs). However, on March 13, the Thai cabinet was tasked to approve the regulation of digital assets and who will collect taxes on digital assets. This was a move to legalize and regulate digital assets, including cryptocurrencies and ICOs, in Thailand. The cabinet approved to impose a 7% value-added tax (VAT) and 15% withholding tax (WHT). The VAT will be for all trades made on the cryptocurrencies, while the WHT will be for the capital gains on investment, in digital assets, such as ICOs.

The positive gesture

Through regulation and legalization of the digital assets, both the Thai government and investors in the crypto market will benefit. For the government, it will be able to collect more revenue from capital gains on investments and on trading of digital assets. With the high rate of adoption of crypto trading and ICOs in Thailand, the government will benefit a lot from taxation.

For investors, it is all about protection. Legalizing the digital assets means that only legitimate ICOs will be launched as they have to be approved by the Thai securities and exchange commission (SEC). Although digital assets will be subjected to two taxes, retail investors will not have to pay the VAT, if they trade on the crypto exchanges. On top of that, the 15% WHT is the ceiling, while the floor is 10% on capital gains. The Revenue Department, of Thailand, will charge 10%, which means digital asset investors can benefit from that.

SEC to regulate ICOs and cryptocurrencies

The Thai SEC will be tasked with the responsibility of regulating ICOs and crypto trading. Since there is no law enacted on how ICOs should be conducted, startups looking to raise funds through ICOs should first seek approval from the SEC. They should do so within 6 months if the law has not taken effect. This will help the regulator to analyze both the investors and the startup raising the funds. Also, the SEC will work closely with the Anti-Money Laundering Office, where the major players in an ICO will report to the office before they can be given a go-ahead.

Moving forward

Even after the cabinet’s approval of the regulation and taxation of the digital assets, it still has to pass through the Council of State, a week after cabinet approval. When approved, it will become law, which will give a greenlight to both ICOs and cryptocurrencies. It is expected that the Council of State will approve it, this month. JIB Computer Group Co Ltd announced efforts in place to launch its cryptocurrency exchange, JIBEX, in April. Other players in the crypto market are expected to take advantage of this development in the coming weeks.

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