Limitations Within the Legal Framework: Challenges Faced by Thailand SEC in Combating Fraud and Money Laundering

The proliferation of money mule accounts and complex investment scams continues to pose an increasingly severe threat to Thailand's capital markets. However, Thailand's Securities and Exchange Commission (SEC) faces regulatory challenges due to rigid laws within its jurisdiction.

SEC Deputy Secretary-General Anek Yooyuen highlighted the complexity of the regulatory landscape, noting that fraudsters primarily operate on social media platforms such as Facebook and TikTok, luring victims with promises of high returns and pressure to invest immediately.

Criminals use mule accounts as "secret weapons" to receive and rapidly transfer illicit proceeds. The situation becomes even more complicated when listed companies are involved.

Yet even when the public expects the SEC to intervene, the regulator faces legal limitations.

In Thailand, the use of mule accounts is governed by the Royal Decree on Mule Accounts and the Royal Decree on Preventing and Suppressing Cyber Crime. The use of illicit funds to purchase stocks falls under the Anti-Money Laundering Act, overseen by the Anti-Money Laundering Office (AMLO).

Yooyuen stated that the SEC can only investigate and take action when violations of the Securities Act are suspected. If the activity does not directly breach securities laws, such as fraud or renting space for illegal acts, the Commission lacks authority to intervene, as doing so would constitute overreach.

However, while general fraud may not fall directly under the Thai SEC's oversight, regulators are actively combating fraud related to digital assets. This includes strengthening licensing, enhancing anti-money laundering and Know Your Customer, promoting multi-agency collaboration, issuing public alerts, and regulating financial influencers.

The Thai regulator emphasized that while the SEC must operate within the legal framework, it will investigate any violations of securities laws.

BrokersView reminds you

Investors should be wary of unsolicited investment offers on social media, as such invitations from unconventional channels are highly likely to be scams.

Investors are advised to thoroughly verify the regulatory status of trading platforms before engaging with them, and to avoid unlicensed brokers. If you have questions about a broker, you can ask BrokersView.