Crypto ETFs in Thailand: What the New SEC Rules Change

#Thailand Prepares Rules for Crypto ETFs and Tightens Requirements for Digital Asset Custody

The Thai Securities and Exchange Commission (SEC) has proposed creating a regulatory framework for crypto ETFs and simultaneously increasing requirements for foreign custodians who store the funds' digital assets. If the rules are adopted, investing in Bitcoin and Ethereum through a traditional exchange-traded product will become easier, but infrastructure and asset protection requirements will increase significantly.

The Securities and Exchange Commission of Thailand (SEC) is taking the next step in integrating crypto assets into the traditional financial market. The regulator has submitted two proposals for public comment: the first concerns the creation of a crypto ETF in the country, and the second concerns strengthening requirements for foreign digital asset storage providers used by mutual and private funds.

The SEC hopes to simultaneously achieve two objectives: expanding regulated investor access to cryptocurrencies and raising security standards for digital asset custody. Discussion of the proposals will last until September 20, 2026. ### What is a crypto ETF

An ETF, or exchange-traded fund, is a fund whose shares are traded on an exchange like stocks.

Instead of purchasing cryptocurrency on an exchange, opening a crypto wallet, and managing private keys, an investor can purchase an exchange-traded instrument whose value is linked to the underlying asset.

This is the model the SEC wants to adapt for the Thai market.

The proposed crypto ETF must be created and managed by a licensed management company. The fund will operate on a passive management principle—its goal is not to actively trade cryptocurrency, but to closely follow the price of the selected digital asset.

In the initial phase, the SEC proposes allowing funds to invest only in Bitcoin and Ethereum. When further expanding the list, the regulator will consider the liquidity of the crypto asset, its prevalence, network security, and the level of investor protection.

Not a basket of cryptocurrencies, but a single asset

An important feature of the proposed model is that the crypto ETF must focus on one crypto asset.

The fund's average net exposure to the relevant asset must be at least 80% of net asset value (NAV) over the course of the fiscal year. Moreover, to achieve this exposure, the fund must not use derivatives.

This means that we are not talking about a complex fund that actively changes its portfolio structure, but rather a highly understandable product: the ETF will seek to track the price of a specific cryptocurrency.

In the initial stage, this means potential Bitcoin and Ethereum ETFs.

Cryptocurrency will be available for purchase on a stock exchange.

Another fundamental change concerns investor access itself.

The SEC proposes that crypto ETFs be listed only on a stock exchange, and not on cryptocurrency trading platforms.

For investors, this changes the traditional model of interaction with the crypto market.

A person will be able to gain price exposure to Bitcoin or Ethereum through a regulated investment product without directly purchasing the asset itself. Traditional stock market requirements remain, including disclosure, management company oversight, and additional investor protection measures.

However, this does not mean the risk disappears.

The ETF's price will depend on the value of the underlying cryptocurrency, meaning investors will still be exposed to the high volatility of the digital asset.

SEC Strengthens Investor Protection

The regulator plans to introduce additional investor disclosure requirements.

Management companies will be required to disclose information about the fund's structure, investment mechanism, service providers associated with the product, and specific risks.

Before trading, investors will be required to confirm that they have reviewed the product's features and understand the associated risks.

The SEC also emphasizes the need to avoid excessive capital concentration in digital assets and to consider one's risk tolerance.

Therefore, the mere existence of a crypto ETF does not mean that cryptocurrency is becoming a low-risk instrument. Rather, the goal is to provide investors with a regulated way to access a high-risk asset.

The main question is where will the Bitcoin and Ethereum be stored?

For a crypto fund, the issue of asset storage is fundamental.

If a fund holds actual Bitcoin or Ethereum, these assets must be stored somewhere. Therefore, the SEC separately regulates the activities of digital asset custodians—specialized organizations responsible for the secure storage of digital assets.

The primary option for Thai crypto ETFs should be custodians licensed in Thailand.

This is where another important change comes in: the SEC wants to simultaneously tighten regulations for foreign custodians servicing funds investing in digital assets.

Foreign custodians will be subject to stricter scrutiny.

Currently, mutual funds Thai private funds and funds may use foreign custodians if they meet established requirements.

The new model involves two mandatory levels of due diligence.

First, the foreign custodian must meet basic requirements: have the necessary expertise, robust cybersecurity, a client asset segregation system, protection against unauthorized transfers, and a strong financial position.

Second, it must be supervised by a regulator that meets certain international or Thai supervisory quality criteria.

The SEC is reviewing an initial list of 11 jurisdictions:

• France;
• Germany;
• Hong Kong;
• Ireland;
• Japan;
• Liechtenstein;
• Luxembourg;
• Malaysia;
• Singapore;
• South Korea;
• United States.

However, a country's inclusion on the list does not automatically imply approval of every custodian located there. Management companies and trustees will still be required to conduct individual due diligence on service providers. ([sec.or.th][1])

Why the SEC is focusing on Thai custodians

In the case of crypto ETFs, the regulator wants to make Thai licensed custodians the primary option.

Foreign providers may be permitted in exceptional cases—if the SEC deems their use necessary and appropriate to market conditions.

This model simultaneously creates restrictions and new opportunities.

For management companies, this means the need to assess in advance the availability of local custodians, their costs, technical capabilities, and ability to handle large volumes of digital assets.

For Thai crypto companies themselves, on the contrary, a new potential market is emerging.

Who else can profit from crypto ETFs

The creation of ETFs will affect significantly more companies than just fund managers and custodians.

The ecosystem will require:

• custodians;
• participants facilitating the creation and redemption of ETFs;
• market makers;
• brokers and exchanges;
• index and price data providers;
• technology companies;
• compliance specialists;
• companies responsible for cybersecurity.

The SEC is also proposing to allow certain licensed digital asset operators, including custodians, exchanges, and brokers, to act as trustees—the fund's supervisory party responsible for asset monitoring and compliance.

However, requirements will vary depending on the role.

For example, if a custodian also acts as a trustee, they will be able to independently store the fund's digital assets. In some other models, the operator acting as a trustee will be required to engage a separate licensed custodian.

This will have implications for the allocation of responsibilities, the prevention of conflicts of interest, and the organization of outsourcing.

A transition period is provided for existing funds.

The new requirements will affect more than just future products.

If mutual or private funds already use foreign custodians to store digital assets, they will be required to verify their providers' compliance with the new criteria.

After the new rules come into effect, such funds are required to have 120 days to comply.

In practice, this could mean either confirming the compliance of the current foreign custodian, amending contracts, or switching to a different service provider.

This is especially important for management companies, as changing the custodian of a cryptocurrency fund is more than just an administrative procedure. It affects asset security, wallet access, auditing, information rights, operational processes, and emergency plans.

This is part of a broader SEC strategy.

The crypto ETF proposal is not an isolated initiative.

Throughout 2026, the SEC will consistently expand its regulatory infrastructure for digital assets. In April, the regulator already put the basic principles for creating a crypto ETF up for discussion, and in May, it proposed changes to the capital and custody rules for digital assets, aimed, among other things, at developing local infrastructure and reducing dependence on foreign providers.

The SEC's 2026-2028 strategic plan explicitly lists the development of crypto ETFs and expanding investment opportunities through crypto assets among its focus areas.

Furthermore, at the end of August, the regulator proposed changes to allow for the development of a digital asset derivatives market, including the possibility of providing clients with access to foreign instruments through regulated intermediaries.

Taken together, these initiatives demonstrate Thailand's gradual move toward a model in which crypto assets are integrated into the traditional financial system through regulated products and intermediaries.

What does this mean for investors

For private investors, the main change is the emergence of a potentially more familiar way to access Bitcoin and Ethereum.

Instead of independently managing a crypto wallet and interacting with crypto,