The Securities and Exchange Commission (SEC) of Thailand has issued a statement asking crypto investors in the country to be careful with DeFi transactions.
The SEC said that they are risky and do not fall under the supervision of the country’s regulators.
The regulatory authority said that DeFi services are gaining popularity, especially those offering deposit taking and lending services.
However, “any DeFi transaction carries a number of risks, including the risks from the products and services which can be complicated,” the statement noted.
The SEC cited several risks such as overleverage, or exploitation by service providers. They also warned users of ‘Rug Pull’ scams, wherein a crypto project team disappears with investor money.
The SEC said, “Therefore, investors are advised to study any DeFi programme before joining the programme and should be exercised carefully in transactions as deposit taking and lending services are not regulated by the financial and capital market regulators in Thailand.”
This warning comes in light of several crypto exchanges and DeFi service providers closing shops due to uncertain market conditions.
The statement also mentioned that the SEC is planning a review of digital asset regulatory guidelines and clarified that it doesn’t support DeFi transactions – deposit taking and lending – either in centralized or decentralized finance.