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BOT clarifies on Phillip Securities’ Bitcoin futures trading service

Phillip Securities (Thailand) has launched trading in Bitcoin futures in Thailand even as the Bank of Thailand (BOT) has questioned its advertisement, which it feels might mislead investors.

Phillip Securities said on Monday that it was ready to provide trading services for investors who want to invest in Bitcoin via the Chicago Board Options Exchange (CBOE) and the Chicago Mercantile Exchange (CME). It aims to provide investors Bitcoin investment services 24 hours day. 

It claims to the first and only brokerage company in Thailand to offer Bitcoin futures trading in the CBOE and CME. Bitcoin futures could also be used to hedge risks, Phillip Securities said. 

BOT assistant governor Chantavarn Sucharitakul expressed her concern over the company’s claim that it was the only brokerage company in Thailand offering Bitcoin futures trading service. “This statement might mislead investors into believing that its service had got approval from the BOT. The BOT has never legalised Bitcoin as a currency for financial transactions,” she warned. 

She explained that the BOT allowed Thai investors to invest in foreign financial assets and they should be aware of the high risks associated with digital currencies.    

Kesara Manchusree, president of the Stock Exchange of Thailand, however said that since Phillip Securities is a member of the CBOE and CME markets, which offer Bitcoin trading, it could provide the Bitcoin investment service to Thai investors. Thai investors, however, should understand well Bitcoin futures and its risks, she noted. 

Meanwhile, Paralee Sukonthaman, assistant secretary-general of the Securities and Exchange Commission, also said the CME and CBOE are under supervision of the US Commodity Futures Trading Commission. Hence, Thai brokerage companies could provide trading service in Bitcoin futures in those two futures markets. The CME and CBOT also are members of the International Organisation of Securities Commissions. Therefore, there was no fraud or money-laundering risk due to the high standard of supervision.  

She said the risk of trading in Bitcoin futures is due to the high volatility of this crypto-currency. She advised investors to have adequate liquidity to prepare for margin call in case of any sharp fall in its value.

Published : January 08, 2018

By : The Nation