Thailand SEC Seeks Comment on Draft Spot BTC, ETH ETFs

Thailand’s Securities and Exchange Commission published draft regulations on Aug. 24 for spot bitcoin and ethereum exchange-traded funds and invited public comment. The announcement sets out two consultation exercises: one on draft rules for spot crypto ETFs and one amending eligibility criteria for foreign custodians.

The draft limits initial eligible products to bitcoin and ethereum funds, with the regulator noting altcoin funds could be considered later if the initial products meet regulatory standards. The SEC framed the proposals as applying the existing ETF regulatory framework to funds that invest directly in digital assets.

Under the draft, a crypto ETF must be established and managed by a licensed asset management company and follow the rules that apply to conventional ETFs and to mutual fund investment in digital assets. The SEC’s notice reads: “A crypto ETF must be established and managed by an asset management company (AMC) and comply with the regulatory framework generally applicable to ETFs, the requirements governing investment in digital assets by MFs, and additional investor protection measures.”

The rules require funds to be listed and traded exclusively on the Stock Exchange of Thailand. Asset managers planning to launch crypto ETFs must disclose full operational arrangements, including custody, valuation and trading processes. The draft expresses a preference for domestic custody but allows foreign custodians to qualify when necessary and appropriate, a measure intended to keep oversight accessible while permitting cross-border arrangements where justified.

Wrapped-style funds that do not hold the underlying digital asset directly would not be allowed initially. The draft envisions spot funds that hold actual bitcoin or ethereum under Thai financial law, differing from earlier products that used wrapper structures.

The announcement is aimed primarily at retail investors and highlights investor protection requirements. In June 2024 the regulator approved the ONE Bitcoin ETF, a wrapped product limited to high-net-worth and institutional investors; the new proposal would extend access to ordinary investors if adopted.

The SEC has invited feedback from market participants and the public as it finalizes rules governing how crypto ETFs will be formed, operated and supervised on the Stock Exchange of Thailand. The consultation also references foreign-listed ETFs, such as BlackRock’s IBIT, in considering cross-border eligibility and custody standards.