The Securities and Exchange Commission (SEC) urged digital asset operators to be cautious when opening trading accounts to customers under 20 years of age as transactions by minors can be nullified by law if done without a guardian.
The SEC urged digital exchange operators to standardise and revise their protocols when providing services for underage customers in accordance with the Civil and Commercial Code as minors are subject to tighter regulations under the law.
The warning came after the regulator found that many local digital asset exchange operators have opened accounts for underage customers and risk having those accounts closed if their account opening processes are not in line with the Civil and Commercial Code.
Any violation of the law can revoke the validity of a contract between a customer and an exchange and nullify any action that follow such contracts, the SEC stated.
Firstly, the operators must carefully consider a minor's capacity to conduct legal acts before commencing their services to avoid any legal issues that may affect a juristic act between the exchanges and a trader.
They must make sure the minor has consent from his or her legal representative before opening an account and start trading as required by Section 21 of the law.
Secondly, the operators must ensure that their know-your-client (KYC) process can effectively identify the true beneficiary of the account before approving and make sure that the client is legally capable of doing various legal acts with the operators.
They must also have a procedure or tool in place to constantly monitor and review customers' information and detect any fraud or false statements.
In addition, the operators must educate their customers and clearly identify risks associated with investment in digital assets before providing services.
At the same time, the SEC urged those interested in trading digital assets to carefully study all relevant information and risks such as their inherent price volatility due to the lack of fundamentals before investing.
When asked about the matter, Bitkub Exchange clarified to the Bangkok Post that it requires every customer aged under 20 years to present an approval letter from their parents or legal representatives in the KYC process before approving an account.
The company understands the risk imposed on underage customers and has applied a tight protocol to protect their benefits, Bitkub said.
