The Thai Securities and Exchange Commission (SEC) has issued a warning against cryptocurrency promotion and misleading advertisements by digital asset platforms. According to local reports, these platforms must be careful with their advertisements and focus on benefiting investors.
The warning comes amid growing concerns over cryptocurrency-related online scams and is part of the regulator’s efforts to increase oversight of the country’s cryptocurrency market.
Exchange advertising must comply with regulatory rules
According to a report by Bangkok Post on Monday, the Thai Securities and Exchange Commission (SEC) has recently launched a new round of crackdown on the domestic cryptocurrency industry. The report stated that the Thai regulator has issued a warning to digital asset exchanges, asking them to be cautious in their operations.
The Securities and Exchange Commission of Thailand (SEC) has issued a warning to digital asset trading platforms, stating that these platforms must be careful when conducting advertising and organizing introducing broker agent (IBA) activities, as these activities may violate the regulatory rules set by the SEC.
Crypto exchanges must comply with the country’s regulatory business standards in order to operate and focus on benefiting investors. All advertising and sales promotions must then be free of false, exaggerated, distorted, concealed or misleading information.
In addition, advertisements and promotions need to warn investors about the risks of crypto investments. The regulatory framework also requires that promotions “not rush” customers into deciding whether to use the exchange to invest in digital assets.
The SEC noted that IBAs may only promote digital token services to “avoid speculation in cryptocurrencies, which are high-risk assets.”
Anek Yooyuen, deputy secretary general of the Securities and Exchange Commission (SEC) of Thailand, mentioned that exchanges generally adopt a strategy of offering special preferential conditions to the public to attract investors to trade on their platforms. This practice includes but is not limited to providing transaction fee reductions, trading rewards, or other forms of incentives.
When cryptocurrency exchanges organize sales promotions and offer incentives to attract users to their services, this practice may encourage people to invest without fully considering the investment risks, especially when it comes to high-risk assets such as cryptocurrencies.
Global regulators focus on crypto advertising
The regulation of cryptocurrency advertising has always been a matter of great concern to various regulatory agencies. In 2022, Spain's National Securities Market Commission (CNMV) introduced a new regulatory framework for this issue.
By introducing such a regulatory framework, CNMV hopes to better regulate cryptocurrency advertising, reduce fraud and misleading behavior, protect the interests of investors, and promote the healthy development of the market. This move also reflects the global emphasis on cryptocurrency advertising regulation and trends.
The rule changes require advertisers and companies seeking to market digital properties to report the content of their promotions to the Spanish regulator at least ten days in advance.
Similar to Thailand’s regulatory framework, Spain, when updating its regulatory rules on digital asset advertising, also emphasized that appropriate risk warnings must be included in advertising content to ensure that investors can clearly understand the risks they may face when investing in digital assets.
Similarly, the UK’s Financial Conduct Authority (FCA) plans to implement stricter rules to regulate cryptocurrency promotion activities in 2023.
Advertisements and promotions have already led to a number of allegations of scams and fraud. In February, a group of influencers and celebrities in South Korea were implicated in a fraud case for allegedly promoting blockchain sports platform Winnerz without making proper disclosures.
The most high-profile cryptocurrency advertising scandal involved the promotion of EthereumMax (EMAX). In 2022, several big-name celebrities and athletes promoted the project through their social media platforms without public disclosure.
Most notably, reality TV star and socialite Kim Kardashian received $250,000 to promote EthereumMax (EMAX) to her over 320 million punters. Kim Kardashian received $250,000 to promote EMAX to her over 320 million followers.
U.S. regulators charged the TV star with violating anti-touting provisions of federal securities laws, resulting in a $1.2 million fine. In addition, the socialite agreed to cease promoting cryptocurrencies for the next three years and cooperate with the U.S. Securities and Exchange Commission (SEC) in its investigation.
When the incident occurred, SEC Chairman Gary Gensler issued a reminder to the exchanges, emphasizing that all promotional activities must comply with the regulatory framework. #泰国SEC #交易所广告
