Decentralized finance (DeFi) projects may be required licensed to legally operate in Thailand, says the country's Securities and Exchange Commission (SEC).
The news caused controversy in the crypto community. While some welcome the idea of regulation with an eye on DeFi's growth, others argue that regulation and decentralized finance are polar opposites.
In any case, it's not clear exactly how the SEC would regulate Thailand's DeFi space.
Probably the most a regulator could do is audit the code to mitigate the risks of fraud. The regulator could also combat the anonymous nature of DeFi by ensuring that users go through the relevant KYC procedures if and when they attempt to convert any DeFi token into fiat currency.
In any case, this is still a gray area, and there is little consensus on how to regulate DeFi. Without central authorities, it is difficult for governments to control or impose any obligations.