Exchanges  •  Regulation

Thailand Flip Flops on Bitcoin, Suggests Exchanges are Still Illegal

(@pete_rizzo_) | Published on February 20, 2014 at 20:34 GMT

Just days after reopening its bitcoin buying and selling services to the general public, Thailand-based bitcoin exchange Bitcoin Co Ltd is once again being threatened by legal uncertainty.

Bitcoin Co Ltd reinstated its services on 15th February, after receiving a letter from its central bank that seemingly suggested it could legally do so.

However, representatives from the Bank of Thailand (BoT) have released new statements suggesting that Bitcoin Co Ltd "interpreted the letter to serve its own interests", and that it perhaps acted improperly by reinstating its services.

The legality of Thailand's bitcoin businesses has been in question now since last July 2013, when statements from the BoT in informal hearings caused the exchange to pause operations. The events caused widespread reports that Thailand had banned bitcoin to be issued around the globe.

Speaking to CoinDesk, Bitcoin Co Ltd managing director David Barnes said it has not been sent any messages by the BoT since receiving the letter in question. Further, he suggested he would hold off on taking any action until he received formal notice.

Said Barnes:

"We plan to continue operations as normal."

Legal dispute

The Bangkok Post indicated that the BoT official it spoke to believes bitcoin exchanges do not fall under Thai law, which would mean that Bitcoin Co Ltd is not eligible to receive the license it needs to conduct business.

The newspaper explained:

"The letter also stated that even though the company allows its customers to trade bitcoins only for baht, it could not prevent customers from exchanging bitcoins for foreign currencies either locally or abroad."

Given this interpretation, Bitcoin Co Ltd would be indirectly involved with foreign currency exchange under the Thailand Exchange Control Act of 1942, the paper said.

Still, such statements do not seem to reflect Bitcoin Co Ltd's updated guidance to its community.

Barnes contends that prior to reopening, Bitcoin Co Ltd revised its terms and conditions so that it and its users complied with BoT guidelines.

The updated terms and conditions read:

"The customer must agree never to exchange bitcoins purchased from Bitcoin Co Ltd for any currency other than Thai Baht. The customer must also guarantee that any bitcoins the customer sells to Bitcoin Co Ltd have never been involved in exchange with any currency other than Thai Baht."

Community reaction

Frankie Bishop, a representative from the Facebook group Bitcoin Thailand, said that he is not surprised that bitcoin continues to operate amid legal uncertainty. Citing the expression 'this is Thailand', he said he believes trading will likely continue in spite of the new statements.

Bishop said that the BoT has effective implied that bitcoin "does not fit anywhere", under current Thai law, and that due to other pressing government matters, is unlikely to further clarify its position.

Explained Bishop:

"Thus, we could conclude that this sits in that area called the 'Gray Area'."

Image credit: Bankok skyline via Shutterstock

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