The Securities and Exchange Commission (SEC) of Thailand warned investors about the high risks in DeFi, and also reminded that regulators do not actually control this industry.
Thailand’s SEC has advised crypto investors to be careful with decentralized finance (DeFi) transactions, calling them risky. The regulator said local regulators have no real control over this young and rapidly growing industry.
The DeFi industry has become popular in the country, especially deposit and lending services. However, as the SEC has stated, these services are risky because the control mechanism for transactions that enforce the terms in smart contracts may not be available on DeFi platforms.
“Investors are advised to research any DeFi program before joining as deposit-taking and lending services are not controlled by financial and capital market regulators in Thailand,” the SEC said.
The regulator also noted that the excessive use of collateral and the lack of accurate operational information about the terms, conditions and functions could put investors at risk. DeFi platforms attract investors with high returns, but there are also hidden risks, including the possibility of fraud.
Earlier, the Thai cryptocurrency exchange Zipmex suspended the withdrawal of funds from the platform. After that, the SEC of Thailand launched a hotline for exchange clients. Zipmex was recently exempted from claims and creditor claims by the Singapore High Court for three months.
In May, analytics firm Chainalysis published a report that of the $1.7 billion stolen in digital assets from the beginning of the year to May, 97% belonged to DeFi.
Source: Bits
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