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Public alerted to perils of crypto mining

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In this illustration, the virtual currencies Bitcoin, Ethereum, Dogecoin, Ripple and Litecoin are displayed on a PC motherboard. (Reuters photo)

The Securities and Exchange Commission (SEC) has warned investors to exercise caution and caution before investing in cryptocurrency mining due to multiple risks and lack of oversight by Thai regulators.

Current advertisements posted online and on billboards invite the public to invest in cryptocurrency mining.

The advertisement encourages the public to invest by purchasing or renting equipment, or investing in the processing power of such equipment, and that such investments will yield high returns, the SEC statement said.

Regulators have warned that investing in cryptocurrency mining involves a number of careful considerations, including cryptocurrency price volatility, risk to competitive market conditions, equipment degradation, and rising electricity bills. I said it was risky.

The SEC said there are potential security risks to investors’ personal data and assets, as well as fraud that does not involve the actual investment.

Additionally, cryptocurrency mining operations are not supervised by regulators under the Digital Asset Business Act of 2018.

If the operator issues digital tokens or provides trading services, it must obtain a business license. Failure to do so will result in penalties stipulated by law.

“The SEC and related agencies are reviewing digital asset regulatory guidelines to provide adequate investor protection,” the SEC said in a statement.

Cryptocurrency mining is defined as miners who use a device to run a mining computer program and receive cryptocurrency as a reward when conditions set by the program are met.

In a related matter, the SEC is improving its standards for digital asset operators’ capital and is holding public hearings on the matter from November 10th through December 12th.

The new standards will apply immediately to new operators, while existing operators will be given a one-year grace period to meet the new requirements.

Under the new regulations, digital asset exchange operators will have to increase their paid-up capital from the current level of 50 million baht to 100 million baht, and digital asset brokers will have to increase their paid-up capital from the current level to 50 million baht. 25 million. A digital asset dealer should increase its paid-up capital from his current 5 million baht to 50 million baht.

The Kasikorn Research Center reported at the end of October that the global cryptocurrency market was highly volatile, having been on a downward trend since the beginning of the year and facing several confidence crises.

The collapse of certain cryptocurrencies and stablecoins, as well as the bankruptcy of some cryptocurrency lending platforms, has affected market confidence.

Rising interest rates around the world are also a major reason for the sale of risky assets such as cryptocurrencies, the think tank said.

As of November 9, 2022, the market capitalization of cryptocurrencies on coiningecko.com is around $950 billion, down over 50% since the beginning of the year.

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