Thailand to tighten checks on crypto firms’ funders

Thailand’s financial regulators circulated draft rules for public comment that would require licensed digital-asset businesses to identify and verify major investors and the sources of their capital.

Under the proposal, exchanges, brokers and asset managers holding licenses would need to disclose the identity of any entity or individual that holds a controlling stake or provides substantial funding. Firms would be required to verify where funds originate and to perform ongoing monitoring of major investors’ profiles and activities.

The draft calls for detailed information on beneficial owners and significant backers, enhanced due diligence for high-value or overseas investors, and mandatory reporting of suspicious funding sources to authorities. Regulators would gain broader powers to inspect records and to require remedial actions or impose penalties for noncompliance.

Officials cited recent failures and frauds in the global crypto sector as reasons for the measures, and said better visibility into funders could help detect attempts to launder money, finance illegal activity or hide conflicts of interest. The draft also seeks to close gaps in existing anti-money-laundering and counterterrorist-financing safeguards specific to digital assets.

The consultation paper sets out rules on documentation, timing and disclosure thresholds, and on firms’ responsibilities to conduct enhanced checks. It would require retention of investor due diligence records for a specified period and submission of periodic reports to supervisors. Possible sanctions listed in the draft include fines and license restrictions for breaches.

Market participants are expected to review and comment during the consultation period. Industry sources expect firms will need to upgrade compliance systems, hire or train staff for investor checks and implement tools to trace complex funding chains. Smaller operators said the additional workload could raise costs and create challenges for businesses with limited resources.

Regulators indicated they will coordinate across agencies that oversee banking, securities and anti-money-laundering enforcement and will engage foreign counterparts to improve cross-border information sharing when funders or intermediaries are overseas. The proposals build on previous rules that brought cryptocurrency trading and token sales under licensing and consumer-protection frameworks.

Officials plan to review public feedback before finalizing rules and to set an implementation timetable to allow firms time to adapt. The final regulations are expected to specify precise disclosure thresholds, documentation formats and compliance deadlines once the consultation concludes.