Authorities are being urged to roll out supplementary laws to plug loopholes in the royal decree governing digital asset transactions, which took effect early this week.
Yanyong Teng-amnuay, an expert on digital transactions from the Digital Economy and Society Ministry, said the legislation came “too early” and focuses mainly on tax collection while excluding matters of legal execution.
Due to the use of cryptocurrency wallets, digital assets are secure and authorities cannot gain access to them or have them confiscated if the owners refuse to provide the passwords, he said.
“Debtors must be required by law to hand over their passwords so the digital assets can be seized and transferred. There must also be regulations to govern [this] as well as auctioning off seized digital assets,” he said during a workshop on the new legislation.
Without organic laws, authorities cannot proceed with seizing and auctioning off digital assets or they will risk violating other laws, he said.
Issues related to money exchanges must also be addressed by the law, he added.
Thailand has not yet established an official digital exchange platform, and digital currencies must be converted into fiat (Thai baht) first to pay creditors.
“Who will handle the currency exchanges because financial institutes are not doing that. The central bank and the Securities and Exchange Commission [SEC] will have to talk this out. As long as there is no law in place, it’s risky to proceed with legal executions regarding digital assets,” he said.
Ruenvadee Suwanmongkol, director-general of the Legal Execution Department, which organized the workshop, said the use of digital assets is posing challenges for the department.
The workshop was organised to familiarise legal execution officials with digital assets after the enforcement of the royal decree.
Citing a recent forum hosted by the LED, Ms Ruenvadee said authorities in other countries have experience in seizing and selling off digital assets and there is a need for the international community to conduct research on how to proceed with the legal execution of digital assets.
She was referring to the 23rd International Congress of the International Union of Judicial Officers early this month. About 500 legal execution officers from 50 countries took part.
She said that in Thailand the department has set up a committee with people from various backgrounds to study if digital assets can be seized and processed under the Civil Code.
She said the study findings are expected in September.
“If debtors have digital assets and creditors want to have those assets confiscated to pay the debts, the department needs to know if the law allows this, and if the authorities are at risk of breaking other laws,” she said.
She added the LED will proceed in line with the SEC’s guidelines and will only handle registered currencies.
The legislation on digital asset transactions and the amendment to the Revenue Code to let the tax-collecting agency impose levies on digital assets were designed to help combat fraud.
