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Thailand’s officials have been alarmed by the launch of a new DeFi yield farming platform.
Thailand’s financial authorities have shifted their attention to decentralised finance, or DeFi, in their latest push to control the bitcoin business.
According to a June 1 report from Bangkok Post, Thailand’s Securities and Exchange Commission (SEC) has announced that any activities related to DeFi may require a license from the financial regulator in the near future. The SEC specifically stated it will target DeFi protocols that issue tokens.
The newest legislative push follows the Sunday launch of Tuktuk Finance, the native token for the Thai DeFi protocol, on the smart contract platform managed by prominent local crypto exchange Bitkub.
According to the story, prices had risen to “several hundred dollars” before plummeting to $1 in a matter of minutes.
The protocol has garnered a total value locked, or TVL, of $18 million, according to the platform’s official website, with the TUK token last trading at $1.93, giving the project a market cap of $7.1 million.
It is the first time that the SEC has specifically targeted DeFi, with the regulator stating:
“The issuance of digital tokens must be authorised and overseen by the Securities and Exchange Commission and the issuer is required to disclose information and offer the coins through the token portals licensed under the Digital Asset Decree.”
Niran Pravithana, CEO of Ava Advisor, an investing robo-advisor software, remarked that the news is appropriate because there are many bogus tokens produced and criminals may hide in message apps such as Telegram and influence token values.
In Thailand, centralised banks have embraced DeFi, with Siam Commercial Bank establishing a $50 million investment fund in February and Kbank testing with DeFi services as part of its commercial growth strategy in April.
According to Cointelegraph, crypto use in Thailand has increased about 600% since November, as reported in April. DeFi has also increased in popularity, with The Defiant recently revealing that the country placed second in the globe in terms of search traffic for the topic “decentralised finance” over the last year.
In May, the kingdom’s regulators replied by announcing intentions to limit the opening of new crypto exchange accounts with severe in-person KYC procedures beginning in July. Foreign investors will also be unable to access Thai exchanges as a result of the legislation, as they will be unable to get local ID cards.