Thailand’s Financial Watchdog Issues Alert on Digital Asset Transactions Following Stablecoin-Linked Concerns
Thailand’s Securities and Exchange Commission (SEC) has issued an urgent directive for digital asset operators to report suspicious transactions, following reports that the iCon Group—a prominent direct sales firm—allegedly laundered funds using the stablecoin USDT. The SEC’s latest move seeks to combat potential money laundering threats within the country’s rapidly evolving digital currency sector.
Concerns arose after the Department of Special Investigation began its probe into iCon Group’s asset transfers, which reportedly involved USDT transactions. The ongoing investigation has seen authorities begin to seize company assets amid allegations that funds were transferred through channels potentially untraceable by conventional financial tracking methods, raising alarm over possible money laundering activities.
Preecha Praipattarakul, Executive Chairman of Upbit Exchange (Thailand), commented on the SEC’s directive, saying, “The SEC’s letter last week requesting digital asset operators report any suspicious trades could indicate money laundering through digital asset exchanges.” Mr. Preecha acknowledged that it is challenging to fully prevent money laundering via cryptocurrency platforms, as exchanges typically function as intermediaries in financial transactions.
He explained that banks become pivotal in processing cryptocurrency transactions when investors convert their digital assets to cash, underscoring the need for cross-agency collaboration to enhance oversight. Mr. Preecha also emphasized that the Thai Digital Asset Operators Trade Association (TDO) is actively working with the SEC to promote transparency and mitigate potential risks.
“In some cases, such as when money is laundered from abroad and subsequently transferred to a local digital asset exchange, often followed by immediate sales of crypto and withdrawals in baht, there is a suspicion of money laundering,” he said. “However, it is not necessary to sell through a local exchange. You can sell through offshore digital asset exchanges and withdraw the funds in cash.”
Highlighting the ongoing risks in cryptocurrency transactions, Jirapat Namtubtim, Business Development Manager at GMO Z.com Cryptonomics (Thailand), noted that while money laundering through cryptocurrency comprises only around 1% of all transactions, there is a possibility that illicit activities via digital currencies may rise as society becomes more cashless.
“When news like this emerges, it can tarnish the reputation of crypto investments. However, we are committed to collaborating on investigations and enhancing our KYC [know your customer] practices by working closely with all parties involved in addressing money laundering,” Mr. Jirapat said.
In response to the SEC’s alert, Att Tongyai Asavanund, President of the TDO, affirmed the association’s commitment to cooperating with the SEC. He acknowledged the challenge in eliminating all risks but emphasized the importance of vigilance, particularly through improved KYC verification processes. The SEC has recommended that the TDO adopt measures to minimize digital asset trading volatility, including alerting investors when cryptocurrency prices fluctuate by over 30% in a single day.
According to TDO data, the value of digital asset trading in Thailand surged to 1.67 trillion baht in 2023, marking a substantial 94.2% increase from the previous year.
Meanwhile, Finance Permanent Secretary Lavaron Sangsnit weighed in on the ongoing investigation, stating that accountability for those involved in the iCon scheme hinges on intent. He explained that holding direct sales networks liable—beyond company owners engaged in fraudulent activities—requires an in-depth examination of any deceptive intentions involved.
“The consequences will depend on how far this intent reaches,” Mr. Lavaron noted. He further suggested that the Finance Ministry may need to review existing legislation governing direct selling to ensure it is adequate for today’s digital commerce landscape. He cited the growing popularity of e-commerce as a factor that has significantly boosted direct sales volume in recent years.
