Thailand SEC Files Lawsuit Against Crypto Exchange OKX for Operating Without License

Key Takeaways:

• OKX is facing a lawsuit from the Thai SEC for allegedly trading without the necessary licenses.
• Nine people charged with promoting OKX’s platform in Thailand.
• The SEC cautions investors against using unlicensed crypto services, emphasizing the risks involved.

Thailand’s SEC files lawsuit against OKX operator & 9 individuals. The charges relate to alleged unlawful trading of digital assets in Thailand, a breach of the nation’s Emergency Decree on Digital Asset Businesses of 2018. The ruling underscores the growing scrutiny of crypto exchanges around the world as regulators increase their scrutiny of the rapidly evolving sector.

At the core of the issue is the allegation that OKX acted as a digital asset exchange without obtaining a license from the Thai SEC. As the SEC complaint states, OKX started offering its services in Thailand around Oct. 15, 2021. The platform purportedly collected a 0.1% transaction fee and aggressively advertised its services on multiple social media platforms including Telegram, X, and Line OpenChat.

The SEC considers these actions to fall within the scope of a digital asset exchange as defined in Thai law. In particular, the SEC identified services matching the definition of digital asset exchange as defined in Section 3 of the Thailand Emergency Decree on Digital Asset Businesses B.E. 2561 (2018). Since OKX had not acquired the requisite license, it may consequently face substantial penalties as spelled out in Section 66 of the Digital Asset Decree, according to the SEC.

In addition to the charges against the company itself, the Thai SEC has also gone after nine individuals who promoted OKX’s services and aided in its expansion into Thailand. The accused persons allegedly used forums such as Facebook, YouTube, Discord, Telegram, and Line OpenChat to increase the power of OKX and bring in new users.

The SEC claims that their actions amounted to “assistance or facilitation” of OKX’s unauthorized business activities which are described by the Emergency Decree as grounds for an infraction under both the Emergency Decree and Thailand’s Criminal Code. One of those accused, Sarun Boonmesrisanga, allegedly marketed OKX via a Facebook page and YouTube account named “ลองลงทุน” (Long Tun), which can be translated as “Try Investing.” If true, the evidence shows just how targeted and deliberate the promotions were. Questions arise about the responsibility of influencers and promoters in the crypto space, particularly regarding the promotion of unregistered platforms and potentially misleading claims.

Along with the legal action, the Thai SEC issued a strong warning to investors about the dangers of using unlicensed platforms for trading digital assets. These platforms fail to offer adequate investor protection, making people reliant on them susceptible to being defrauded, scammed, and having their funds misused for money laundering.

The SEC emphasized that investors should verify the licensing status before using a digital asset platform on the official SEC website or mobile application. Doing so is critical to prevent potential financial damage. The SEC has made reference to its website and SEC Check First mobile application to assist investors in verifying the legitimacy of digital asset businesses before investing with them.

The OKX case in Thailand is part of a broader trend: regulators around the world are paying closer attention to crypto exchanges. Governments are attempting to strike a balance between encouraging innovation in the digital asset space and ensuring the protection of investors as well as financial stability. The move shows that regulators are not afraid to act decisively against platforms that do not abide local laws.

OKX is also facing legal issues in Thailand, but despite this is expanding into other markets and is a recent recipient of a Markets in Financial Instruments Directive II (MiFID II) license in Europe. It is now awaiting final approval from the Malta Financial Services Authority (MFSA), a key approval that will permit OKX to provide derivative functionalities in the broader European Economic Area, a strategic move to enter regulated markets.

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