SEC Warns Listed Companies on Digital Asset Investments

SEC advises listed companies to exercise care and caution before investing in digital assets

The Securities and Exchange Commission (SEC) advises listed companies that invest or plan to invest in digital assets to exercise care and caution before making investment decisions. This is because digital assets come with considerably high risk due to price volatility. In case of making such investment, listed companies are advised to do so through licensed digital asset business operators to ensure legal protection. 

On 17 September 2021, the SEC sent a circular to all listed companies advising listed companies that invest or plan to invest in digital assets to exercise discretion in making decisions regarding such investment. This is to prevent material impacts on the companies’ financial position or operating results as digital asset investment is usually exposed to relatively high risk from price volatility.

In addition, the SEC reiterates that listed companies should take action and consider various factors relevant to digital asset investment. For example, risk assessment and potential impacts, measures and mechanism for risk management, readiness of work systems and personnel, analysis and selection of digital assets to invest, and investment tracking tools, etc. Listed companies should also consider disclosure of information related to digital asset investment via the Electronic Information Transmission System of the Stock Exchange of Thailand (SET), their own company websites and the annual registration statement / annual report (Form 56-1 One Report). This is to ensure that investors can access material information that is accurate and sufficient for investment decision making.   

In any case, the SEC suggests that digital asset transactions be executed through licensed digital asset business operators that are supervised by regulators to ensure that such investment is protected by law. In this regard, digital asset business operators in Thailand are required to obtain a license under the Emergency Decree on Digital Asset Businesses B.E. 2561 (2018) and to be regulated by the SEC Office to ensure that investors receive proper protection by virtue of the Emergency Decree.

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