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Thailand’s Securities and Exchange Commission (SEC) is drafting new laws to ban digital asset platforms from supporting crypto asset depository services to lending platforms. After the huge crashes experienced by lending platforms at the start of the year, the Thai SEC made the decision to ban lending platforms. For this, the SEC officially conducted a poll for the users to collect their decisions until October 16 on the official website.
The Thai SEC took action to protect traders and users from crypto lending platforms, which may pose a risk to transaction suppliers and related activities. To combat the crashes, the regulatory body made the decision.
The institution added that the decision is necessary since many crypto lending platforms have been facing problems for the past few years. The DeFi platform, the popular crypto lending company Celsius network, Voyager Digital, and Babel Finance are some of the most well-known examples. Celsius network and Voyager Digital are cases of bankruptcy. Recently, Zipmex was added to the list.
The lending platforms play a vital role on the DeFi platforms. From the start of the year, DeFi lending protocols were hiked to $50 billion (USD). For lender’s safety, the platform introduced a “liquidation ratio” that relates to the number of loans lent by borrowers.
The cryptocurrency exchange platform Zimpex was banned for withdrawals as per the Thai SEC. The complaint noted that Zipmex failed to submit the transaction details and the crypto wallets within the deadline. The regulatory institution SEC interrogated whether the platform utilized crypto lending platforms Celsius and Babel Finance. Zimpex lent $48 million (USD) to Babel Finance and $ 5 million (USD) to Celsius network, a bankrupt cryptocurrency lender.
According to the SEC, “Zimpex froze withdrawals due to volatile market conditions and financial problems facing the major business partners.”
Zimpex tweeted on Twitter that the company is thinking of restarting its withdrawals from its trade wallet. However, their Zip Up accounts still remain frozen until the next declaration.
In addition to the banning of crypto lending platforms, the SEC took another major step to protect crypto users from fake advertising. The institution stated that from October 2022, the crypto platforms will have to submit the details of their advertisements and their spending on social platforms to advertise. The main aim was to control the level of advertising on the crypto platform.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
