On 24 August 2026, the Securities and Exchange Commission of Thailand (SEC) published two consultation papers that set out how locally established crypto exchange-traded funds, or crypto ETFs, would be created, managed and safeguarded.
The first contains draft regulations on the establishment and regulatory framework for crypto ETFs in Thailand; while the second proposes revised qualification requirements for foreign digital asset custodians (DA custodians) engaged by mutual funds (MFs) and private funds (PFs) that invest in digital assets.
The SEC first held public consultations on the broad concept of a Thai crypto ETF framework between April and May 2026, and will close the second round on 20 September 2026. The rules are expected to take effect later in the year.
Key takeaways from the current crypto ETF draft
Under the draft framework, a crypto ETF must be established and managed by an asset management company (AMC). The fund would be subject to the regulatory framework that already applies to ETFs, the requirements governing investment in digital assets by mutual funds, and a set of additional investor protection measures.
The draft regulations address five areas:
- AMC readiness: An AMC seeking to establish a crypto ETF must demonstrate adequate organisational readiness. This covers personnel, operational systems and arrangements with relevant service providers, and is intended to ensure that the fund can operate securely and in an orderly manner.
- Investment policy and structure: A crypto ETF must be established and managed as a passive vehicle that tracks the price of the crypto asset in which it invests. The fund must also maintain average net exposure to a single crypto asset of at least 80 percent of net asset value over each accounting year. The SEC will prescribe which crypto assets are eligible, taking into account liquidity, broad market acceptance, network security and investor protection. Bitcoin and Ethereum will be the only eligible assets during the initial stage.
- Safekeeping of fund assets: Crypto ETFs must be safeguarded primarily by DA custodians regulated by the SEC.
- Trading venue and investor protection: Crypto ETFs must be listed and traded exclusively on the Stock Exchange of Thailand, and additional protections will apply.
- Disclosure: Investors must also receive information regarding the characteristics and risks of the product, and must acknowledge and confirm their understanding of those risks before trading. Business operators must also emphasise appropriate asset allocation, the need to avoid excessive concentration in digital assets, and the importance of investment decisions that match each investor’s risk tolerance and financial capacity.
During the initial phase, custody of digital assets held by a crypto ETF must primarily sit with an onshore DA custodian. The SEC may permit the use of a foreign DA custodian in future, where the custodian meets the prescribed qualifications and its use is necessary and appropriate in light of prevailing circumstances. A foreign provider would need to be supervised by a regulatory authority with legal powers. It would also have to operate under regulatory and investor asset protection standards that the SEC considers adequate.
The second consultation paper addresses foreign DA custodians engaged by mutual funds and private funds investing in digital assets. The objective is to establish consistent standards for offshore custody across the relevant fund types rather than to treat crypto ETFs in isolation.
An AMC may delegate digital asset investment management only to a licensed digital asset fund manager. The requirement is intended to ensure that the delegated function sits with an entity holding the relevant expertise, and subject to regulatory oversight appropriate to the asset class.
A New Role for Digital Asset Businesses
DA custodians and other digital asset business operators with adequate readiness in personnel and operational systems may apply to register as mutual fund supervisors for crypto ETFs under Section 121 of the Securities and Exchange Act B.E. 2535 (1992).
However, an operator registered on this basis may supervise crypto ETFs only. To qualify, it must demonstrate adequate readiness in financial standing, personnel and operational systems, consistent with the existing framework for mutual fund supervisors, and must maintain those standards throughout the period in which it acts.
A mutual fund supervisor may appoint a sub-custodian in accordance with existing regulations, but the custody of digital assets must in all cases be performed by a licensed DA custodian.
The SEC will amend the applicable regulations to allow mutual funds and private funds to invest in Thai-domiciled crypto ETFs, in addition to the foreign crypto ETFs they may already access.
At the same time, the SEC will not permit the issuance, establishment or offering of alternative products linked to foreign crypto ETFs during the initial phase. The examples given include depositary receipts referencing foreign crypto ETFs, and arrangements through which securities companies facilitate investment in foreign crypto ETFs for customers who are neither institutional investors nor ultra-high-net-worth investors.
For legal advice on digital asset regulatory compliance, AML/CFT obligations, or any other matters in Thailand’s digital asset sector, please contact our Technology, Crypto, and Web3 team at [email protected].
This article is provided for general information purposes only and does not constitute legal advice. While care has been taken to ensure accuracy at the time of writing, laws and regulatory instruments may change. Specific advice should be sought for individual circumstances.
