A major financial regulator in Thailand seeks to define the qualifications of cryptocurrency traders to ensure investor protection.

The Thai Securities and Exchange Commission has decided to schedule public hearings this month to meet specific requirements for investors looking to open a cryptocurrency trading account, the local news agency Bangkok Post reported on Monday.

By launching a new qualification system, the Thai SEC will ensure that new retail investors entering cryptocurrency trading have sufficient financial resources to absorb the risk associated with highly volatile cryptocurrency prices.

The Secretary General of the Thai Securities and Exchange Commission, Ruinwadi Suan Mongkol, has suggested that the future qualifications of a crypto investor in Thailand may include requirements such as age, business experience and financial knowledge, as well as a certain wealth:

“Cryptocurrency has a high risk for investors. We need to set some selection criteria, such as age, business experience, income or wealth level to reduce the risk. These restrictions are already in place with high-yield bonds, which are only available to certain types of investors.”
The official also indicated that cryptocurrency investors need to be well aware of the risks of trading cryptocurrencies. “Digital assets are a big problem not only for Thailand but also for international regulators,” she added.

The new qualification system appears to have been initiated by Thai Finance Minister Arkom Termittayapaisit, who has asked the SEC to monitor local digital exchanges to protect new investors. Local authorities are particularly concerned that ambitious crypto investors are moving into the industry amid a massive boom in cryptocurrencies such as Bitcoin (BTC).

Last week, Termpittayapaisith raised concerns about the growth of cryptocurrency trading in Thailand, and warned investors about the enormous risks associated with cryptocurrency. “Cryptocurrency has enormous risks,” the official said. “Risk awareness will help these investors avoid excessive speculation about these assets.”

According to data compiled by The Bangkok Post, the volume of cryptocurrency purchases from Thai retail investors has increased steadily from 500 million baht ($ 16.7 million) in November 2020 to 1.1 billion baht ($ 40 million) in January. The SEC has reportedly said that the number of new investors in the cryptocurrency area increased by 124,000 accounts in the first week of February, to almost 600,000 accounts as of February 8.

According to the data, Bitcoin was the best-selling cryptocurrency on Thai stock exchanges in January, accounting for more than 40% of the total trading volume. Cryptocurrency follows Ether (ETH) with a share of around 24%, Dogecoin (DOGE) and XRP with a share of 19% and 12% respectively.