The Thai securities regulator now requires cryptocurrency custodians to have a backup plan in case of unanticipated circumstances.
To ensure effective custody, the Thai SEC enacted regulations on January 17 requiring virtual asset service providers (VASP) to implement a digital wallet management system. The new rules are directed at VASPs or crypto storage service providers (custodians).
Three essential needs are listed in the legislation, including the implementation of a policy and set of rules for regulating how digital wallets and private keys are managed in terms of risk. According to the regulations, VASPs must inform authorities about such policies and present action plans to guarantee compliance.
The SEC also asked cryptocurrency custodians to provide policies and processes for creating, developing, and administering digital wallets and keys. The government will also demand that cryptocurrency custodians have a backup plan if something unexpected happens that might compromise the wallet management system.
The SEC added: “This includes developing and testing action procedures, identifying accountable individuals, and reporting the event.”
In case of any incident affecting the security of systems associated with the custody of digital assets, which could substantially impact the help of customers, a system security audit and a digital forensic investigation are also necessary.
The notification states that the new rules were effective on January 16, 2023. Cryptocurrency custodians must completely comply within six months of the law’s effect.
Following industry failures like the FTX crash, Thailand’s SEC has announced new crypto restrictions that align with its objectives to enact stricter crypto legislation. According to reports, the authorities opened a fresh inquiry in early January into a local cryptocurrency exchange named Zipmex because it was unlicensed to manage digital asset funds.