Thai Police Crackdown on Unlicensed Cryptocurrency Firms

Thai police have raided the offices of five unlicensed cryptocurrency firms, arresting 11 employees as part of a wider crackdown on illicit crypto-related activities within Thailand.

Officers from the Economic Crime Suppression Division (ECD) had received warrants to search the premises of five companies operating in the provinces of Nakhon Pathom, Samut Sakhon and Bangkok.

ECD commander Thatphum Jaruprat stated that the 11 arrested individuals included a mix of executives and less senior employees, and police seized six computers and other evidence.

An investigation by the ECD revealed that the arrested individuals had been illegally operating e-money firms with a combined annual turnover of approximately one billion baht, or $29.3 million.

The raided firms allegedly acted as intermediaries for local investors wishing to buy investment products sold overseas, requiring customers to transfer money into e-wallets to complete cross-border purchases.

Thailand strictly regulates forex-based e-money businesses, with its 2017 Payment System Act requiring all such enterprises to register and secure licensing.

However, the ECD noted that the firms’ failure to register created a money laundering risk and damaged the economy by enabling capital flight.

The police have charged the 11 suspects with providing unlicensed electronic money services, and it’s not the first time this year that authorities have acted against illegal crypto activities.

Thailand’s Crypto Crackdown

In January, Thailand’s Cyber Crime Investigation Bureau proposed a ban on Polymarket, arguing that the crypto-based prediction marketplace poses “economic and social risks.”

Last month, Thai and Chinese police froze cryptocurrencies worth around $2.5 million after arresting two Chinese individuals charged with fraud and human trafficking.

Recently, Binance TH reported one of the world’s largest increases in investment complaints, receiving over 1,000 data requests from police in the past three years.

Despite perceptions of a crackdown, Singapore-based blockchain advisor Anndy Lian asserts that Thai authorities primarily target bad actors.

Lian highlighted significant operations, like ‘Trust No One,’ that resulted in numerous arrests and seizures, as well as raids on illegal mining operations caught stealing electricity.

He emphasized that Thai police focus on fraudsters and thieves rather than broadly policing the crypto space but maintain a zero-tolerance policy for unregistered platforms.

Thailand and Crypto

Overall, Thailand’s cryptocurrency industry is growing healthily. The nation ranked 16th in Chainalysis’s 2024 Global Crypto Adoption Index and received over $50 billion in cryptocurrency value from July 2023 to July 2024.

The SEC has been updating rules surrounding cryptocurrency investment for mutual and private funds to attract legitimate investments.

With the SEC considering local Bitcoin ETFs and stablecoins, it appears they are trying to manage, not eliminate, the industry. Thus, Thailand’s regulatory stance on crypto is more balanced compared to other Southeast Asian jurisdictions, positioned between Singapore’s liberalism and China’s restrictions.