Thailand SEC Allows Accredited Investors to Access US Spot Bitcoin ETFs

The financial regulators of Thailand have made some important changes in their ETF trading laws. As per these regulations, local investors are allowed exposure into Bitcoin spot ETFs filed in United States. However, it is important to note that only accredited investors are granted access to these funds. The Securities and Exchange Commission amended its native laws.

The latest policy changes will allow the local regulators to gain exposure in Bitcoin spot ETFs that are filed in United States and started trading on 11th January, 2024. However, various nations across the globe have imposed a ban against local hedge funds and financial institutions from seeking exposure to these ETFs.

At the same time, some nations have prevented local investors from purchasing shares of US-based spot Bitcoin ETFs via foreign brokerage firms.

As per the trading allowance by Thai regulators, only institutional investors and ultra-high net worth individuals will be able to invest in the American spot Bitcoin ETFs. These policy changes were published in a report on 12th March in a local media outlet called Bangkok Post.

Prior to the recent policy changes, asset management firms refrained from covering ETFs that tracked the price of digital currencies.

Accredited Investors from Thailand can now Invest in Spot Bitcoin ETFs

It is important to note that in United States, the Bitcoin ETFs that directly track performance of the digital asset from the spot market are classified as securities.

In the same manner, the asset managers operating in Thailand are only allowed to seek exposure in spot Bitcoin ETFs listed in US granted that they are also defined as securities. The regulatory agency has defined these regulations in the revised charter of SEC Act.

Risks Associated with Bitcoin ETPs

Secretary General Pornanong Budsaratragoon has noted that regulators permit only accredited investors to access spot Bitcoin ETPs on account of high-risk nature. At the same time, the asset management firms initiated a request for the regulatory agency to add investment vehicles that are backed by digital assets such as Bitcoin.

However, the SG noted that the agency conducted in-depth research to finalize the decision for letting asset management firms invest in digital assets or not.

The SG retained that the protective measures were adopted on account of high risk. The recent policy change signifies a big deviation of the regulatory agency from its earlier stance on the matter.

At the beginning of 2024, Thai SEC reportedly claimed that it does not have any plans to let local asset management firms launch a personalized version of spot Bitcoin ETFs within their jurisdiction.

Bitcoin ETF Policies in Thailand

Retail investors are not part of the equation to participate in spot Bitcoin ETF investment policies in Thailand. It is important to note that cryptocurrency investing has gained considerable traction in Thailand. However, on account of local laws, the usage of digital assets has remained fairly conservative. The local government imposed a ban on using cryptocurrencies for payments in March, 2022.

In the same manner, Thai SEC banned the cryptocurrency utility for lending and investment purposes in July, 2023. Even so, the regulatory agency reversed the ban on retail investors to purchase cryptocurrencies that were backed by real estate or infrastructure projects as early as January.

It seems that local regulators have continued to ease their grip on cryptocurrency trading. Thailand’s cabinet recently approved a bill that grants tax breaks for token investors.

According to the local media outlets, Director-General of Revenue Department Kulaya Tantitement recently stated that investors who are generating profits from investors may exclude their investment token holdings from personal income tax when calculating for 15% withholding tax.

He further stated that these tax measures should be considered effective as of 1st January, 2024. He noted that tax deductions would pave the way in making the nation an investment hub in Asia.