2. Agenda
1. Digital Assets, cryptocurrencies, and ICOs
• What are digital assets, cryptocurrencies, and ICOs?
• Regulatory landscape of Thailand and
other jurisdictions
2. Securities Token Offering (STO)
• STO in securities transactions
• Case studies
• Benefits and challenges
• Legal and regulatory considerations
5. 5
Regulated
underlying
Non–regulated
underlying
Traditional
securities
offering
STO /
Asset Tokenization
Existing
securities
To be announced
by the SEC
Regulated Exempted
Digital
token
Cryptocurrency
Regulated Exempted
Securities
• The Securities and
Exchange Act
• The Emergency Decree on
the Specific Purpose Juristic
Person for Securitization
• The Trust for Transactions
in Capital Market Act
E-money / E-payment
The Payment Systems Act
Derivatives
The Derivatives Act
Digital assets
The Emergency Decree on
Digital Asset Businesses
Investment
token
Utility
token
Not ready-to-use
(B1)
Regulated
Ready-to-use
(B2)
Exempted
Others to be
announced
by the SEC
Asset
Tokenization
Digital tokens and laws
17. 17
Digital Asset Business Operation
(cryptocurrencies)
source: https://www.sec.or.th/EN/Pages/Shortcut/DigitalAsset.aspx (as of 22 May 2019)
18. Type of
Tokens Thailand Malaysia Hong
Kong Germany United
Kingdom
United
States Singapore
Security
Token
Securities, the type of
which depends on the
features and
characteristics
Securities
✔
(upcoming
ICO
regulations
to be
observed)
Securities
✔
Securities
✔
If investment
fund – maybe
If “specified
investment” and
authorized
✔
Securities
✔
Securities
✔
Equity
Token
Shares (securities),
could be offered if
1. the SEA, as
amended, came into
force in allowing
scripless
2. overcome restriction
under the CCC
3. overcome restriction
under the PLCA
Digital token
(Securities)
✔
(upcoming
ICO
regulations
to be
observed)
Securities
✔
Securities
✔
If shares
(specified
investment) and
authorized
✔
Securities
✔
Securities
✔
Debt
Token
Debentures (securities)
could be offered if
the SEA, as amended,
came into force in
allowing scripless
Digital token
(securities)
✔
(upcoming
ICO
regulations
to be
observed)
Securities
✔
Securities
✔
If debt
instrument
(specified
investment)
and authorized
✔
Securities
✔
Securities
✔
Global perspectives on digital tokens?
19. Type of
Tokens
Thailand Malaysia
Hong
Kong
Germany
United
Kingdom
United
States
Singapore
Investment
Token
Investment token
(one type of digital
token and
one type of digital
asset)
Maybe, if
categorized
as “digital
token”
(upcoming
ICO
regulations to
be observed,
if it is a digital
token)
May be
securities;
Securities
✔
If “specified
investment”
and
authorized
✔
Securities
✔
(term not
commonly
used)
Securities
✔
Asset-
backed
Token
Securities or
Digital Asset?
depends on the
SEC policy
(could be offered,
depends on what
type of asset is
being backed by
the tokens)
Maybe, if
categorized
as “digital
token”
(upcoming
ICO
regulations to
be observed,
if it is a digital
token)
Not legally
defined;
May be
securities; or
structured
products or
commodities
Securities
✔
(If the token
represents
direct
ownership in
the asset,
then
depends).
If “specified
investment”
and
authorized
✔
Securities
✔
Maybe, if
“fund
structure,”
then
regulated as
securities.
Global perspectives on digital tokens?
20. Type of
Tokens
Thailand Malaysia
Hong
Kong
Germany
United
Kingdom
United
States
Singapore
Utility
Token
Utility token (one
type of digital
token and
one type of digital
asset)
(could be offered
(exempt for ready-
to-use utility
tokens))
Not legally
defined;
permitted, if
categorized
as “digital
token”
Not legally
defined;
May be
securities; or
structured
products or
commodities
Generally
permitted
(unregulated
)
✔
If investors
bear
development
risk
Generally
permitted
(unregulated)
✔
If e-money,
then
regulated
Securities
✔
(term not
defined in
regulations
but
recognized
within the
industry)
Permitted
(unregulated)
✔
Cryptocur-
rency
Cryptocurrency
(one type of digital
asset)
(could be offered -
only needs to
comply with digital
token offering
requirements if
they are offered
for fund raising
purpose)
Digital
currency
✔
Not legally
defined;
May be
securities; or
structured
products or
commodities
Financial
instrument
(unit of
account)
✔
Term not
defined;
(currently not
regulated)
✔
Securities
✔
(term not
defined in
regulations
but
recognized
within the
industry)
Permitted
(soon to be
regulated)
✔
Global perspectives on digital tokens?
25. 3. Payment made into
REIT account
6. Investment
25
Asset Tokenization: Simplified transaction flows and case study
Asset
REIT
Underwriter
Trustee
holds ownership / leasehold in the properties
Registrar
Aspen REIT, Inc.
backed
by
Marketing
Platform
Asset
Management
Co.
Smart
Contract
and
Token
Tracking
acting
as FA
SEC
Traditional (REIT)
2. Offer trust
certificates of
REIT units to
underwriters for
public offering
1. File for
permission to
sell REIT units
7. Rent income
STO / Asset tokenization
Token
Holders
Issuer
18% ownership in
the asset
Case Study:
Asset
Management
4. Subscription
proceed
transferred to
the Trustee
5. REIT is established when the money
from the sale of trust certificates received by
Trustee and Trust Deed is executed.
Compliance / Regulatory &
Protocol Oversight
(Transaction Record-Keeping)
1. Offering & Trading
AML/KYC
2. Clearing & Settlement
3. Ongoing Compliance
Dividend
Communication & Disclosure
Risk management
Smart routing
Licensed DLT Exchange
Third Party (Templum)
Investor
(Holds units)
Allocation
Appointment
owns
Receive filing
from issuer
REIT
Manager
(Settlor)
26. Benefits and challenges
26
Efficiency in
value chain
Investment options
and liquidity
Faster clearing
and settlement
Compliance and
Supervision
Cyber threats
BENEFITS
CHALLENGES
Socioeconomic
Impact
Legal and Regulatory
issues
