The Thai Securities Exchange Commission (SEC) is attempting to safeguard cryptocurrency traders by introducing new rules for virtual asset service providers (VASPs) providing crypto storage services.
On January 17, the SEC released regulations that require VASPs to create a digital wallet management program that ensures secure custody. The new guidelines are meant to apply to VASPs offering cryptocurrency storage services.
The regulations include three main requirements. They mandate VASPs provide guidance and policies to manage the risk of digital wallets and private keys. The rules also require VASPs to communicate with regulators about such policies and to provide action plans to ensure compliance.
The SEC also requested that crypto custodians provide policies and procedures to design, develop, and manage digital wallets and keys. The authorities will also require crypto custodians establish a contingency strategy in the event of an unforeseen event that could affect the wallet management system.
“This includes designing and testing action procedures, designating responsible persons, and reporting the event,” The SEC added: “A system security audit is also required, as well as a digital forensics investigation in the event of any event that affects the security of systems related to the custody of digital assets, which could cause significant impacts on customer assets” .
According to the announcement, the new regulations will come into effect on January 16, 2023. Crypto custodians must observe the effective date within six months.
Related: Binance Will Allow Institutions To Store Cryptocurrencies With Cold Custody
The latest crypto regulations support the SEC’s plans for tighter crypto regulations following industry mishaps such as the FTX crash. In early January, the authority launched an investigation against Zipmex, a local cryptocurrency exchange, accusing the company of providing digital asset management services without authorization.