Crypto Ads Crackdown: Thailand’s SEC Warns Exchanges Against Misleading Advertising

Thailand’s
Securities
and
Exchange
Commission
(SEC)
warned
digital
asset
platforms
over
crypto
promotion
and
misleading
advertisement.
According
to
local
reports,
these
platforms
must
be
careful
with
their
ads
and
focus
on
benefiting
investors.

The
warning
follows
the
regulator’s

efforts
to
stringently
regulate
the
country
amid
growing
concerns
over
crypto-related
online
scams.

Exchange’s
Ads
Required
To
Comply
With
Regulatory
Rules

The
Bangkok
Post

informed
on
Monday
of
the
SEC’s
latest
crackdown
on
the
crypto
industry
in
Thailand.
Per
the
report,
the
country’s
regulator
has
cautioned
digital
asset
exchange
to
proceed
with
discretion.

The
SEC
is
warning
platforms
regarding
ads
and
the
organization
of
Introducing
Broker
Agent
(IBA)
events,
as
these
activities
might
“violate
the
rules”
under
the
agency’s
supervision.

Crypto
exchanges
must
follow
the
country’s
regulatory
business
standard
to
operate
and
focus
on
benefiting
investors.
All
advertising
and
sales
promotions
must
subsequentially
be
free
of
false,
exaggerated,
distorted,
concealing,
or
misleading
information.

Moreover,
ads
and
promotions
are
required
to
warn
investors
of
the
risks
regarding
crypto
investments.
The
regulatory
framework
also
requires
promotional
campaigns
to
“not
rush
customers”
into
deciding
whether
to
use
an
exchange
to
invest
in
digital
assets.

The
SEC
noted
that
IBAs
can
only

promote
digital
token
services
“to
avoid
speculation
on
cryptocurrencies,
which
are
high-risk
assets.”

Anek
Yooyuen,
SEC’s
deputy
secretary-general,
stated
that
exchanges
“often
draw
investments
by
offering
special
privileges
to
the
public.”
As
such,
these
offerings
tend
to
entice
investors
to
trade
on
their
platforms:

When
operators
organize
sales
promotions
by
offering
rewards
to
entice
people
to
use
the
service,
this
could
encourage
the
use
of
the
service
without
considering
the
investment
risks.
This
is
especially
the
case
for
cryptocurrencies.

Crypto
Ads,
A
Global
Regulatory
Concern

The
regulation
of
crypto
advertisements
has
been
a
hot
topic
among
regulators.
In
2022,
Spain’s
National
Securities
Market
Commission
(CNMV)
issued
a
new
regulatory
framework
that
tackled
ads.

The
change
of
rules
stated
that
advertisers
and
companies
trying
to
market
digital
assets
had
to
inform
the
Spanish
watchdog
about
the
content
of
their
promotional
campaigns
at
least
ten
days
in
advance.

Similarly
to
Thailand’s
regulatory
framework,
the
ads
were
required
to
include
appropriate
risk
warnings.
The
change
of
rules
also
included
influencers
and
celebrity-paid
promotions.
Likewise,
the
UK’s
Financial
Conduct
Authority
(FCA)

introduced
stricter
rules
for
crypto
promotion
in
2023.

Promotional
campaigns
and
ads
have
resulted
in
scams
and
fraud
allegations.
In
February,
Korean
influencers
and
celebrities
were
involved
in
a
fraud
case
for
allegedly
promoting
the
blockchain
sports
platform
Winnerz
without
disclosure.

The
most
prominent
crypto
advertising
scandal
involves
the
EthereumMax
(EMAX)
promotional
campaign.
In
2022,
big
celebrities
and
athletes
promoted
the
project
on
their
social
media
platforms
undisclosed.
Most
notably,
reality
TV
star
and
socialite
Kim
Kardashian
received
$250,000
to
promote
EMAX
to
her
more
than
320
million
followers.

The
US
regulator
charged
the
TV
star
with
“breaching
the
anti-touting
provision
of
the
federal
securities
laws,”
which
resulted
in
a
$1.2
million
penalty.
Furthermore,
the
socialite
agreed
to
stop
crypto
promotion
for
three
years
and
cooperate
with
the
SEC’s
investigation.

At
the
time
of
the
incident,
the
SEC’s
Chair
Gary
Gensler
reminded
exchanges
that
promotions
must
comply
with
the
regulatory
framework.

Total crypto market cap is at $2.24 trillion on the weekly chart. source: TOTAL on TradingView

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