ICO fundraising has not been easy for token issuers this year, especially in the presence of stringent regulations. Therefore, the Securities and Exchange Commission (SEC) is conducting a public hearing to relent regulations on private sales and pre-sales of initial coin offerings (ICO), with the aim to decrease the difficulty for ICO issuers raising funds.
As stipulated by the digital asset royal decree, issuers must receive the SEC’s approval before issuance and sales of digital tokens, and it must be made available through a digital token service provider.
The mandate applies to every case, including digital token sales that are offered through private placement such as pre-ICO sales and private sales.
However, the current regulations pose as an obstruction to ICO fundraising. Thus, the SEC plans to mitigate certain laws for digital tokens sales made through private placement to specific investor groups.
The SEC intends to eliminate the need of submitting registration statements and a draft prospectus for private digital token sale. Also, making the process better for digital token providers.
The securities watchdog plans to relent the criteria for digital token sales, only for a limited number of investors and stipulated fundraising amounts. Since pre-ICO sales and private sales are highly risky and have limited information disclosure.
Whereas, a limit of 50 investors in the duration of 12 months will be applied to founders or those associated with the founders of digital token businesses. And for individuals, the limit for digital token sales will be capped at 20 million baht in a 12-month duration.
However, there is no limit for investors or fundraising amount for institutional investors, private equity firms, venture capital and ultra-high worth investors.
To prevent the exploitation of investment opportunities during ICOs, the SEC plans to precondition all ICO issuers to distribute all digital tokens to every investor group right after the end of public ICOs.
The SEC’s deputy secretary-general, Tipsuda Thavaramara said:
“The proposed guideline is an attempt to find greater equilibrium in the regulatory process and reduce regulatory impediments, while taking risk management and investor protection into accounts. The proposed criteria may not be fully completed, but it is a starting point for businesses to proceed accordingly.”