Among Southeast Asian countries, Singapore has become a famous center for blockchain entrepreneurship due to its developed economy, finance and highly market-oriented background. (Singapore blockchain supervision policy and its advantages and disadvantages evaluation, corporate entrepreneurship compliance countermeasures, can be found in Deng Jianpeng, Sun Penglei: "Intermediary Chain Supervision and Compliance", Mechanical Industry Press, 2019 edition). In addition, since 2018, Thailand has also actively followed up, and the attitude towards the blockchain (including various financing and currency-issuing activities) has undergone a major change. Its important symbol is that Thailand has introduced the blockchain and digital assets in recent years. Under the premise of satisfying its legal requirements, enterprises can raise funds and open virtual currency exchanges in the country. Therefore, the details of the country's specific regulatory policies are particularly worthy of attention from entrepreneurs and investors. At present, we have not seen a detailed introduction of relevant policies. This article tries to analyze this in detail. The author has partially introduced the country's regulatory policy in the "Taiwan blockchain supervision policy and practice (one)" last week. This article is the research and analysis of the remaining parts.
(3) Thailand ICO Regulations
On June 7, 2018, the Thai SEC passed the rules on cryptocurrency and ICO regulatory framework, and released the details of digital asset transaction regulation the next day, which indicates that ICO is legalized in Thailand, but requires full government process supervision. This provision sets out specific requirements for market operators, ICOs, and approved digital asset exchanges, with the rules becoming effective on July 16, 2018. Thai SEC Secretary General Rapee Sucharitakul said that the ICO Regulations apply to the Royal Decree. The ICO must fulfill the relevant provisions of the Royal Decree. For example, the issuer needs to disclose correct and transparent information, meet the qualification requirements of the company's directors and management personnel, submit business performance and financial reports, and the offenders will face civil and criminal penalties for the issuance of digital assets. Businesses take mandatory accountability. We combine the Royal Decree and the ICO regulatory framework rules  to sort out the Thai ICO regulatory policy.
1. Thailand's business license for blockchain
The platform for the "ICO Portal" business must apply for approval from the Thai SEC, which generally needs to be completed within 90 days. Once the ICO portal is approved, operators who wish to issue an ICO must first review and screen through the ICO portal, and the Thai SEC will approve applications for the issuance and sale of digital currency.
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(1) License of the ICO portal
The Thai SEC will first approve applications submitted by the ICO Portal, which is the online market for token sales operated by potential ICO organizers. The platform that wants to engage in the ICO portal business must apply for approval from the Thai SEC. Applicants for the ICO portal must register in Thailand with a minimum registered capital of 5 million baht (equivalent to approximately RMB 1 million) and must take necessary measures to ensure that the token is supervised for at least one year after the issue, while maintaining a total of 5 million baht. Reserve funds. According to officials, these portals must have sufficient resources to evaluate the ICO issuer's business plan, project structure, technical capabilities, and source code.
And in accordance with Article 25 of the Royal Decree, the ICO Portal must submit a report on the results of operations and financial status to the SEC Office of Thailand, and any impact on the interests of digital token holders, investment decisions, prices or changes in investors. Information, and must comply with the principles, methods and conditions of the Thai SEC notice. If you violate Article 25 or fail to comply with the principles, methods and conditions mentioned in Article 25, you will be fined not more than 100,000 baht and not more than 3,000 baht per day until the correct performance of your obligations; Information or hidden important information shall be punishable by imprisonment for not more than 2 years, or a fine of not more than 500,000 baht, or imprisonment and fines.
(2) License of the Thai digital token issuer
The Thai SEC requires digital token issuers to be a company registered under Thai law and to provide unlimited assets to institutional investors, ultra-high net worth investors, venture capital and private equity firms. Digital token issuers must first review and screen through the ICO portal and obtain the SEC license from Thailand. According to Article 6 of the Royal Decree, digital tokens are issued to the public. The digital token issuer must obtain the SEC license from Thailand before issuing the digital token. The issue is limited to public limited companies (PLC). ). At the same time, it is necessary to submit the digital token auction details and draft prospectus to the Thai SEC. The details also need to comply with the requirements of the ICO portal approved by the Thai SEC.
For existing operators who have been engaged in the digital asset business prior to the entry into force of the Royal Decree and wish to continue to operate, they must submit an application to the SEC Office of Thailand within 90 days (or before August 14, 2018). These businesses can continue to operate unless the application is rejected.
2. Thailand's regulations on the scope of digital tokens
According to some Chinese media, the Thai SEC allows seven types of digital tokens to be traded and treated as virtual currency. The seven digital tokens are ETH, BTC, BCH, XRP, LTC, XLM (Stellar) and ETC. Other digital tokens cannot be traded.  However, we investigate individual exchanges that claim to be licensed in Thailand. The number of digital tokens traded is not limited to the above seven, and at the same time, the transaction pairs of legal currency and virtual currency, virtual currency and virtual currency are opened. Among them, the transaction of legal currency and virtual currency is mainly completed by the over-the-counter transaction (OTC) provided by the trading platform.
3. Registered funds, prepaid fees and annual fees
The new rules also clearly list the registered capital, prepaid fees and annual fees of all market operators.
(1) Registered funds
Centralized exchanges and brokers must have a registered capital of 50 million baht and 25 million baht. Decentralized exchanges and brokers have a registered capital of 10 million baht and 5 million baht. However, the conditions for how the exchanges and brokers meet the "centralization" and "decentralization" are not specified. The ICO portal has a minimum registered capital of 5 million baht and requires necessary measures to ensure that the token is supervised for at least one year after the issue, while maintaining a reserve fund of 5 million baht (equivalent to RMB 1 million).
The Ministry of Finance authorized enterprises involved in digital asset transactions to become local registered companies. The digital asset trading platform prepaid at 5 million baht and paid 5 million baht for prepayments for token distribution and cryptocurrency operations (250 each) Wantai 铢). Brokers and digital asset dealers are required to pay a fee of 2.5 million baht and 2 million baht, respectively.
(3) Annual fee
Different types of companies are required to pay different amounts of annual fees. The annual fee for cryptocurrency transactions is 0.002% of the total transaction amount, and the minimum charge limit is 500,000 baht ($15,619). The maximum limit is 20 million baht ($624,775). The annual fee for the brokerage firm is charged at 0.001% of the total transaction volume. The minimum fee limit is ($7810) and the maximum limit is 5 million baht ($156,200).
4. Limitation of ICO investors and investment amount
The Thai SEC has rules on who can invest in ICO and divides ICO investors into four categories. The first category is institutional investors; the second category is ultra high net worth investors. According to the definition of the Thai SEC, such investors have a net worth of at least 70 million baht (about 2.1 million US dollars), or at least 25 million baht (about 752,785 US dollars). The third category consists of venture capitalists and private equity firms. The fourth category consists of other retail investors. For retail investors, the maximum investment limit for a single ICO project is 300,000 baht (approximately US$9,034) or no more than 70% of the total value of the token. For the first three types of investors, such as institutional investors and high net worth investors, there is no limit on the amount of ICO investment.
(4) Other concerns of Thai virtual currency participants
1. Thailand operates a digital asset business subject to licensing
The Royal Decree specifies the digital asset business that can be licensed, such as the ICO portal license, the license of the digital token issuer, and the license of the digital asset vendor. Some business access conditions are described above. Among them, the most potential participants should be concerned with the license of digital asset sellers (ie ICO project parties). Article 26 of the Royal Decree clarifies that digital asset sellers must obtain ministerial approval under the Thai SEC's recommendation, and the above-mentioned application and approval, as well as the application and approval fees, must comply with the principles, methods and conditions of the Thai SEC Notice. When making regulations, the Thai SEC must consider the following situations: (1) Have sufficient funds for the operation of digital asset business to prevent risks in all aspects. (2) Customer asset security. (3) Maintain network security, protect computer systems and information from being stolen, and include risk management and control caused by stealing and other incidents. (4) The business has a complete and reasonable accounting system, and auditors recognized by the Securities and Exchange Commission audit the finances. (5) Having measures to identify customers, detecting the true validity of customer information, and having measures to finance terrorism or money laundering.
Article 26 of the Royal Decree does not directly specify what is the “principle, method and condition of the ministerial notice”, and only the considerations required in Article 30 to display “principles, methods and conditions”. Although the specific entry threshold is not specific and specific, it can be speculated that it will focus on factors such as sufficient capital, maintenance of customer assets, maintenance of network security, anti-terrorism, and anti-money laundering. The entry threshold for digital asset business operators is also subject to other provisions of the Royal Decree. After the issuance of the Royal Decree, Thailand has issued a number of regulatory rules (such as the ICO Regulations). It is not excluded that in the future, Thailand will use the Royal Decree as the basic law to issue more specific rules for different businesses. If potential digital asset participants want to enter the Thai market, they must understand the licensing process and obtain the license before they can carry out related business.
2. The distinction between Thai digital asset operators and customer property
Article 31 of the Royal Decree stipulates that if a digital asset operator keeps customer assets, the operator must separately record each client's assets and store them separately from their own assets and may not use them for any other purpose. The digital assets that the customer deposits under the name of the operator are still owned by the customer.
3. Taxation and tax rate of Thai digital asset business
In March 2018, Thailand plans to impose a 7% VAT on investors in all cryptographic transactions and a 15% return onholding tax. Thai Finance Minister Apisak Tantivorawong delivered a speech at the cabinet meeting on March 27, announcing that the government cryptocurrency tax framework will cover all retail transactions and cryptocurrency investment returns  .
However, with the introduction of the tax law amendments and related policies, the Thai tax policy has changed somewhat from the plan in March this year. The tax bureau has waived the 7% VAT for users of the cryptocurrency exchange approved by the Thai SEC. The two royal decrees of the Royal Decree and the Income Law Amendment came into force on May 14, 2018. The Act provides for a 15% tax on cryptocurrency profits, that is, holding or trading virtual currency and digital tokens. All income is subject to a 15% capital income tax. According to the official explanation, as long as the investment income of digital currency and digital tokens is obtained, the portion exceeding the investment must be taxed at a rate of 15%. On May 15, the Thai tax authorities announced that individual digital currency investors were exempt from 7% VAT. Saroch Thongpracum, Minister of Legal Affairs of the Thai Taxation Office, announced at a press conference on May 15 that “the Thai Taxation Office will abandon the VAT charged to users of cryptocurrency exchanges approved by the SEC in Thailand”. However, Saroch stressed that “individual traders still have to pay a 15% capital income tax, which is also called withholding tax, which is the income of each transaction.  ”
3. Reflections on Thailand's regulatory policy
Thailand is closely following the pace of financial technology innovation. The regulation of the blockchain industry has been banned and gradually moved towards cautious opening. Finally, after enacting a series of relevant regulations and regulatory policies, the blockchain technology, including those that may involve financial risks, such as ICO, virtual currency trading, etc., may provide the most detailed regulatory basis in the world to date. Issues related to corporate operations, investment behavior, legal risks and taxation point to a clear direction. Overall, after experiencing twists and turns, Thailand has moved towards actively embracing the path of the blockchain. The attitude of the Thai government towards the blockchain industry, virtual currency or ICO has both the reasons for realizing the development trend of new technologies and new things in the future, as well as the “decentralization” of the blockchain, virtual currency or ICO itself. It is related to the objective characteristics of the "reform". It recognizes that the simple ban is actually limited, and it is better to implement a more meaningful long-term monitoring mechanism. Countries with similar attitude changes, as well as Russia.
These regulatory policies in Thailand, compared with developed countries such as Japan and the United States, have commonalities, such as focusing on some basic risk bottom lines of the industry, requiring operators to implement anti-money laundering, counter-terrorism financing, and maintaining the cyber security of virtual currency trading platforms. Wait a minute, there are also some of their own innovations. In particular, the virtual currency trading platform is required to be isolated from the user's funds, making up for a large gap in Japanese regulations. Of course, how is the virtual currency trading platform's own funds and users' funds (including legal currency and various virtual currencies) effectively isolated? How to prevent trading platforms from misappropriating user assets? How to effectively protect the assets that users store on the trading platform when the trading platform declares bankruptcy? These risk prevention and treatment mechanisms need to be further improved. At least the individual Thai virtual currency trading platforms we have investigated have not yet implemented such rules. Whether the Thai SEC and the network supervision department have the ability to effectively and comprehensively supervise all existing trading platforms in the territory remains to be verified.
In addition, the Thai regulations on the relevant entities involved in virtual currency false statements and insider manipulation, etc., basically in the framework of the application of traditional securities regulations, the virtual currency legislation and regulation, the relevant regulatory agency is the Thai SEC, it is logical. Such legislation and supervision have certain value and significance. As we all know, virtual currency trading and token issuance lack effective supervision. In the past five or six years, relevant market manipulation and insider trading have been extremely serious, which is similar to the illegal behavior of the stock market. For example, the issuer of the ICO project stated false news, causing the so-called positive, pushing up the price of the currency, and harvesting the "chives" and other behaviors. Therefore, Thailand has introduced detailed legislation on token-related false statements, insider trading and market manipulation, which is of great reference value.
However, unlike the similar violations in the stock market, virtual currency transactions have characteristics such as cross-border and cross-platform. Efforts such as capital flows, insider trading, and manipulation of markets are easily achieved through global distribution. Thailand has such detailed rules and how to ensure that it is strictly enforced in practice? Both virtual currency transactions and ICOs are typically international and have a degree of anonymization. How can Thailand's regulation and legislation achieve effective results in practice?
As American Justice Holmes said: "The life of law is not in logic, the life of law lies in experience." Cesare Beccaria, founder of the Italian classical criminal school in the eighteenth century, wrote "On Crime and Punishment" The Chinese believes that "the most powerful binding force for crime is not the harshness of punishment, but the certainty of punishment. This certainty requires judicial officials to abide by their duties. Judges are selfless and serious, and all this is only in the context of justice. Under conditions, it can be a useful virtue. Even if the penalty is temperate, its certainty is more impressive than the fear caused by the terrible punishment of the first line of impunity."  Regulations at the text level Perfection is only one aspect of promoting the healthy development of the cause. When the rule of law in a country is raised to a higher level, the enforcement of the rule of law is more certain, reducing the speculation and luck of business operators or investors, making the legal system more predictable and reducing the risk of legal regulation. Come a huge impact. Therefore, after the above-mentioned regulations in Thailand are formulated, combined with the actual operation of the company, we need to observe its implementation in practice and objectively evaluate its effects.
Author: Deng Jianpeng (Central University of Finance and Law Professor)
This article is authorized by the author, starting with Babbitt information, please indicate the source when reprinting
 Regulations can be found in: “Thailand Announces the Regulations on Cryptographic Monetary Regulations”, https://www.sohu.com/a/235271613_100153539. The relevant regulatory content in Thailand can be found in the official website of the SEC of Thailand: https://www.sec. Or.th/EN/Pages/Home.aspx; Royal Government Gazette website: http://www.mratchakitcha.soc.go.th/; Government Data Management Committee website: http://www.oic.go.th /web2017/main.html.
 See https://www.jinse.com/bitcoin/203219.html, visit time: October 10, 2018.
 See “Draft Royal Decree on the Regulation and Taxation of Cryptographic Transactions in Thailand”, http://x.itunes123.com/a/18040219593071754/, visit time: September 1, 2018.
 See “Thailand Relief for Individual Cryptographic Investors 7% VAT”, http://www.btc798.com/articles/19474.html, visit time: September 1, 2018.
 [Italian] Beccaria: "On Crime and Punishment", Huang Feng (translation), China Encyclopedia Publishing House, 1993, p. 59.