Thai SEC Releases New Set of Crypto Regulation for Custody Providers
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On January 16, 2023, the Thai SEC released a new set of regulations for cryptocurrency custody services. According to the SEC, companies that provide crypto custody services for their customers’ digital assets must now “establish a digital wallet management system to accommodate efficient custody of digital assets and keys and ensure the safety of clients’ assets.”
Thai SEC Lists Its Three Requirements
Three key requirements are included in the SEC’s recently released set of regulations. The first step entails providing rules for managing the risk associated with digital wallets and private keys. According to the SEC, a “key means a cryptographic key or any other data that must be kept confidential in order to be used for approval of transfers or transactions related to digital assets in digital wallets.”
Additionally, according to this legislation, suppliers of custody services must “clarify such policy, action plans, and procedures, work supervision and internal control to ensure compliance with the policy.”
The second criterion has to do with the management of digital wallet policies and processes. According to the regulation, custodians are required to create:
“Policy and procedures for designing, developing, and managing digital wallets as well as creating, maintaining, and accessing keys or other related information appropriately, securely, and safely.”
The final rule concerns a company’s backup plan in the event that something happens that might have an impact on the management system for keys and wallets at the organization. As per SEC regulations:
“This includes laying out and testing action procedures, designating responsible persons, and reporting the event. An audit of system security is also required, as well as digital forensic investigation in case of any event affecting the security of systems related to digital asset custody, which could cause significant impacts on clients’ assets.”
It is hardly shocking that the SEC has implemented new requirements for cryptocurrency custody service providers. The SEC said in December that it was getting ready to enact harsher regulations for digital assets.
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