Financial regulators in Thailand are preparing to tighten restrictions on creating new accounts on crypto asset exchanges.
According to a May 3 report by the Bangkok Post, the country’s Anti-Money Laundering Bureau (AMLO) announced that crypto exchanges will have to personally verify the identity of new customers using a “dip-chip” machine from July.
While new users can currently verify their identity on crypto exchanges by submitting documents online, the Dip-Chip machines scan a chip embedded in Thai citizen IDs, requiring customers to be physically present for the verification process. The new rules may also prevent foreign investors – who cannot obtain a Thai ID card – from accessing exchanges in the country.
Legislators also seem interested in applying the same rules to sales of gold in excess of THB 100,000 (approximately $ 3,200). Some gold dealers in the state capital, Bangkok, are already using dip-chip machines for identity verification.
The tightening of regulations is due to the growing popularity of crypto assets in Thailand. The number of accounts on Thai crypto exchanges rose from 160,000 in late 2020 to nearly 700,000 in early May. Industry executives have raised concerns that the new rules will stunt the growth of the Thai crypto sector. Poramin Insom, co-founder and director of the Thai crypto exchange Satang Corp, stated:
“Most digital asset exchanges are still busy preparing their systems for the growing number of customers as new account applications keep coming in. However, this growth can slow down as the application process becomes more complicated.”
The Thailand Digital Asset Operators Trade Association plans to hold a debate on the in-depth regulations at an upcoming forum to facilitate dialogue with regulators such as the Securities and Exchange Commission and AMLO.
Bitkub, Thailand’s largest exchange, which was temporarily suspended by the SEC in January, declined to comment on the new KYC requirements, stating that the new rules have not yet been officially implemented.
In mid-March, the central bank banned the use of a stablecoin tied to the Thai baht.