Thai SEC Drafts Spot Bitcoin and Ether ETF Rules With an 80% Floor

Thailand's securities regulator wants public comment on how a locally listed spot crypto fund should work. The Securities and Exchange Commission opened a consultation on 25 August covering exchange-traded funds that hold Bitcoin and Ether directly, with responses due by 20 September. A fund would have to keep an average net exposure of at least 80% of its net asset value to the asset it tracks across each accounting year. Management would be passive. Nothing is approved yet, and the paper builds on an earlier round the SEC ran in April.

What the floor is meant to stop

The 80% clause is the core of the draft, and two accounts of it differ. Cointelegraph quotes the paper requiring exposure "of at least 80% of its net asset value to that asset over each accounting year", and says each fund tracks a single cryptocurrency. The Crypto Times renders the same requirement as 80% of net asset value to "one or more cryptocurrencies". One reading permits a basket. The other does not. Neither outlet notes the difference, and nothing located settles it.

Only Bitcoin and Ether qualify in the first phase. The SEC says later additions would be judged on liquidity, market acceptance, network security and investor protection. Funds would be run by licensed asset management companies and traded on the Stock Exchange of Thailand. Managers would have to give buyers risk education before they trade, take a confirmation that the product is understood, and disclose the structure, the service providers and the specific risks.

Custody stays at home, with a door left open

Assets would sit primarily with digital asset custodians licensed and supervised inside Thailand. Overseas custodians are permitted only on a condition the draft states plainly.

Foreign custodians may be used "when necessary and appropriate in light of prevailing circumstances", the consultation said.

A qualifying overseas provider would also have to meet standards the Thai SEC considers adequate and answer to a home authority with real legal powers. Two further details each rest on a single report. The Crypto Times says any sub-custodian must itself hold a Thai digital asset custodian licence. Cryptobriefing says qualified custodians could act as trustees to these funds, subject to capital, staffing and operational tests. Neither is confirmed elsewhere. Custody licensing has been the gate elsewhere in the region, where BitGo became the first global custodian licensed in South Korea earlier this year.

The part about foreign funds does not reconcile

Three outlets describe the treatment of overseas products three ways. coin-turk writes that the SEC will not approve derivatives or depositary receipts tied to foreign crypto ETFs during the first phase. cryptometer says foreign-issued products are limited for now, while Thai mutual and private funds may buy locally originated ones. Cointelegraph writes that mutual and private funds could invest in Thai-domiciled crypto ETFs alongside foreign ones, with only the alternative wrappers shut out. We could not establish which of the three matches the draft text.

How far Thailand has already gone

Retail access is the change. Thailand approved its first spot Bitcoin ETF in June 2024, and the accounts of who could buy it differ: Cointelegraph says ultra-high-net-worth and institutional investors, coin-turk says institutions only. Either way it was not a product for the public. coin-turk alone reports a zero-rate capital gains regime on crypto transactions running to the end of 2029.

The fund market the draft points at is large. The Crypto Times put global crypto ETF assets near $119.8 billion as of 24 August, with $337.6 million flowing into Bitcoin funds that day and $115.6 million into Ether funds. CoinDesk's live coverage the same day gave spot bitcoin fund inflows of $337.56 million, the same figure to the decimal. The assets total and the ether number stand on one outlet. Comments close on 20 September. A revised text has to follow before any manager can file. Regional supervisors have been setting dates of their own, and Pakistan opened VASP licensing with a 5 September deadline last week. Thailand has published none for the final rule.