Jay Mart Plc's upcoming initial coin offering (ICO) is considered an investment with utility returns and is not classified as raising funds through securities issuance, meaning such fund-raising initiatives are legitimate, says the Stock Exchange of Thailand (SET).
ICOs are not illegal and market regulators do not plan to thwart this fund-raising initiative, but ICO issuers have to disclose information through the white paper to provide investors with project details, said SET senior executive vice-president Santi Kiranand.
Since ICOs are high-risk unregulated investments, investors have to study details on the white paper closely and decide to embark on such investments or not at their own risk, said Mr Santi.
At present, there are many returns that can be derived from ICOs. These could be in the form of a utility such as a coupon used to buy products or services, the right to own a specific asset, or the right to receive revenue or profit-sharing without engaging in day-to-day operations, according to the Securities and Exchange Commission (SEC).
An ICO white paper comprises the project's objectives, business model and business plan, use of proceeds, business milestones, legal risks, digital token functions, sales and mechanisms of digital tokens, management and advisory.
ICOs see a company, usually a tech startup, issue digital tokens, typically in exchange for a cryptocurrency such as bitcoin or ethereum.
Tokens can be used to buy future services from the issuer or can be sold to ostensibly reap a handsome return.
ICO transactions are similar to crowdfunding, whereby the issuer presents a business model to investors, but the key differences are in that the raised funds are in the form of digital currencies using blockchain technology, and the deals are enforced using smart contracts.
Regarding concerns over share price manipulation, the bourse will monitor if there is any evidence pointing to irregularities in share price movement, Mr Santi said.
Jay Mart's shares rose by 39% year-to-date to 25 baht per share on Feb 1 from a closing price of 18 baht per share on Dec 29.
Jay Mart has insisted that it will move ahead with selling its JFin digital currency through an ICO as scheduled in February and March, with company officials voicing confidence that the plan will comply with soon-to-be-launched regulations.
The company has expressed a willingness to collaborate with authorities to make fintech a success in Thailand and is ready to adjust any details if found to be not in compliance with the regulations, said chief executive Adisak Sukhumvitaya.
Prinn Panitchpakdi, country head of CLSA Securities Thailand and an adviser to Jay Mart, said Jay Mart has been in constant discussions with the market regulators and the company's JFin ICO is not considered as securities issuance.
As a listed company, Jay Mart has been trying to disclose all information pertinent to this investment project.
Investors' investment decisions are the main factors influencing Jay Mart's share price movements rather than a share manipulation scheme, Mr Prinn said.
Investors may believe the company's earnings from its smartphone and retail businesses will improve, while the JFin ICO is considered a minor business operation, he said.
SEC deputy secretary-general Tipsuda Thavaramara said digital money is a new investment trend arising from the prolonged low-interest environment occurring globally and liquidity excess from major central banks' monetary stimulus programmes, which in turn prompt search-for-yield behaviour among investors.
The main factor supporting the rise of digital currencies is the desire to break away from monetary control by central banks and international financial organisations by allowing demand and supply to determine the value of digital currencies, Mrs Tipsuda said.
