Thailand Eyes Spot Bitcoin ETF Approval Amid Crackdown on Polymarket

Thailand’s Securities and Exchange Commission (SEC) is taking significant steps towards the potential approval of spot Bitcoin exchange-traded funds (ETFs) in the country. At the same time, the SEC is cracking down on Polymarket, a cryptocurrency-based prediction market, accusing it of operating illegal gambling activities in Thailand.

Spot Bitcoin ETFs Under Review

On January 14, 2025, Pornanong Budsaratragoon, the Secretary-General of Thailand’s SEC, announced that the regulatory body is reviewing the possibility of allowing spot Bitcoin ETFs to be listed on local exchanges. This move could mark the first time such products are available for Thai investors, both retail and institutional. Budsaratragoon acknowledged the growing global adoption of cryptocurrencies, noting that Thailand must adapt to offer investors more options while ensuring proper protections are in place.

Despite the SEC’s cautious approach, the country has already seen the introduction of crypto-related investment products. In June 2024, Thailand’s One Asset Management launched a fund-of-funds offering exposure to overseas spot Bitcoin ETFs. However, direct listings of Bitcoin ETFs on local exchanges remain off-limits.

In addition to spot Bitcoin ETFs, Thailand's SEC is also exploring the possibility of allowing firms with strong credit ratings to issue stablecoins backed by corporate bonds. This move aims to expand access to debt markets, with some industry leaders, such as Thaksin Shinawatra—the de facto leader of the ruling Pheu Thai Party—suggesting the creation of government bond-backed stablecoins. Thaksin has also proposed the idea of a Bitcoin sandbox in Phuket for tourism-related cryptocurrency transactions, signaling a broader push to embrace blockchain technology.

Thailand's crypto market remains active, with the country ranking 16th globally in terms of overall cryptocurrency adoption, according to Chainalysis’ 2024 Crypto Adoption Index. The nation also ranks 15th in retail centralized service value and 19th in decentralized finance (DeFi) transaction volume.

Polymarket Faces Legal Challenges in Thailand

While Thailand is moving toward a more crypto-friendly regulatory environment, its authorities are also cracking down on platforms they view as operating outside the law. The country’s Technology Crime Suppression Division (TCSD) has set its sights on Polymarket, a platform that allows users to trade on prediction markets using cryptocurrencies.

On January 14, 2025, TCSD commander Police Lieutenant General Trairong Phiwpaen confirmed that the division intends to propose the closure of Polymarket in Thailand, labeling it as illegal online gambling. Trairong stated that the use of cryptocurrencies for betting activities violates Thai law, complicating enforcement efforts due to the anonymity and cross-border nature of blockchain transactions.

Thailand’s move against Polymarket follows similar actions taken by other countries. On January 12, Singapore blocked the site as part of its own crackdown on unlicensed gambling platforms. Polymarket also withdrew from France in November 2024 after authorities began investigating its compliance with local gambling laws. Taiwan was the first jurisdiction to ban the platform, arresting 17 individuals for using it to place bets on the presidential election.

Despite these legal challenges, Polymarket continues to operate globally. In the first 15 days of January 2025, the platform recorded over $515 million in trading volume, with its Super Bowl Championship 2025 market alone attracting more than $1.12 billion in trades.

A Pivotal Moment for Thailand’s Crypto Landscape

Thailand’s stance on cryptocurrencies is evolving. On one hand, the SEC is considering the approval of spot Bitcoin ETFs and exploring new stablecoin regulations to boost financial inclusion. On the other hand, authorities are working to ensure that platforms like Polymarket comply with the country’s gambling laws, reflecting the challenges of regulating a rapidly growing digital economy.

As Thailand navigates these issues, its approach could serve as a model for other countries seeking to balance innovation with investor protection and legal compliance. Whether it’s the approval of Bitcoin ETFs or the crackdown on crypto-based gambling, Thailand’s regulatory landscape is shaping up to be a critical factor in the global crypto industry’s future.