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INITIAL COIN OFFERING
Kowit Somwaiya
Managing Partner
LawPlus Ltd.
Corporate Finance Law Thailand 2018
Omega World Class
23 February 2018
Dusit Thani, Bangkok
The information provided in this document is general in nature and may not apply to any specific situation. Specific advice should be
sought before taking any action based on the information provided. Under no circumstances shall LawPlus Ltd. or any of its directors, part
ners and lawyers be liable for any direct or indirect, incidental or consequential loss or damage that results from the use of or the reliance
upon the information contained in this document. Copyright © 2018 LawPlus Ltd.

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Kowit Somwaiya
Managing Partner, LawPlus Ltd. and LawPlus Myanmar Ltd.
Vice President, IPAT
Director, INTA
• B.A. (Education – English), Ubon Ratchathani Rajbhat University
• LL.B., Thammasat University
• LL.M., University of Illinois
• Certificate of Instruction for Lawyers, Harvard Law School
• Domnern Somgiat & Boonma
• Chandler & Thong-ek
• George & Kowit
• Herbert Smith Freehills

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www.lawplusltd.com
Newsletters
Articles on laws
LawPlus Ltd.
•Established 2003
•Banking and finance
•Corporate and M&A
•FDI and investment promotion
•IP and IT
•Dispute resolution and litigation

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• Types of Currencies
• Some Coins and Tokens
• Crypto Market
• Crypto Rises and Falls
• ICO Basics
• White Paper in Practice
• Legal Issues for ICOs and Cryptocurrencies
• Future Regulations for ICOs
Presentation Agenda

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Commodity Currencies
•transfer of value
•transfer of assets
Types of Currencies

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Fiat Currencies
•represent assets
•backed by a government
•formerly backed by gold
Types of Currencies

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Cryptocurrencies - General
•not an asset
•not linked to or backed by an asset
•not backed by a government
•digital coin
•digital token
•crypto
Types of Currencies

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Cryptocurrencies – Digital Coins
•digital currencies, such as Bitcoin and Ethereum
•use blockchain (encryption) to secure and verify transactions
•validate transactions chronologically
•function as a currency or a medium of exchange
•Bitcoin = first digital coin, most popular
•Altcoins = digital coins other than Bitcoin
Types of Currencies

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Cryptocurrencies – Digital Tokens
•use blockchain (encryption)
•normally backed by a project
•have intrinsic value derived from an asset
•represent an access to a product or service
Types of Currencies

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Bitcoin
Some Coins and Tokens
• Established in 2009 by “Satoshi Nakamoto”
• Blockchain technology
• Mathematical encryptions
• Public key for engaging in transactions
• Private key for authorizing or blocking Bitcoin activities
• Capped at 21 million coins
• Decentralised worldwide payment system, no central repository
• Lower transaction fees compared to traditional online payment systems
• Peer-to-peer transactions
• Can be exchanged for other currencies
• Accepted as means of payment for goods and services
• Can be mined
• 1 Bitcoin = USD11,355.33 (19th
December 2017)
• 1 Bitcoin = USD10,398 (19th
February 2018)

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Ethereum
Some Coins and Tokens
• Established in 2015
• Public blockchain distribution platform
• Capped at 18 million coins per year
• Second largest digital currency (after Bitcoin)
• Decentralised
• Making the process of creating blockchain applications easier and efficient
• Can be mined like Bitcoin
• 1 Ethereum = USD770 (19th
December 2017)
• 1 Ethereum = USD949.88 (19th
February 2018)

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Ripple
Some Coins and Tokens
• Established in 2012 by Chris Larsen and Jed McCaleb
• Digital payment network for financial transactions
• Peer-to-peer decentralised platform
• Relies on a consensus protocol to avoid double spending
• Allows transfers of money in any form
• Does not have a mining system
• 1 Ripple = USD0.823 (19th
December 2017)
• 1 Ripple = USD3.56 (5th
January 2018)
• 1 Ripple = USD1.20 (19th
February 2018)

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OmiseGo
Some Coins and Tokens
• Raised USD25 Million in a few days
• Ethereum-based decentralised digital wallet
• Issuer operates in Thailand, Japan, Singapore and Indonesia
• Partnered with TrueMoney
• Peer-to-peer value exchange not requiring a bank account
• Allows sending and receiving money without a bank account
• Allows usage of fiat and crytocurrencies
• 1 omisego = USD19.90 (19th
December 2017)
• 1 omisego = USD16.55 (19th
February 2018)

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BIG Token
Some Coins and Tokens
• Ethereum-based (ERC20)
• Decentralized
• Pre-launched on 8 February 2018 in Bangkok
• Value at USD40 million
• 400 million coins
• USD 0.10 per coin
• Intrinsic value backed by prime real estate
• Disrupt traditional financial intermediaries
• To be listed on a crypto-exchange

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JFIN COIN
Some Coins and Some Tokens
• 1st
ICO by listed companies in Thailand
• Pre-launched on 14 February 2018
• Utility tokens
• Raises funds for development of Decentralized Digital Lending Platform
• Uses blockchain technology
• 300 million coins
• 100 million coins for ICO
• THB6.6 (USD0.20) per coin

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Total Crypto Market Capitalization
Crypto Market
17.7 USD Billion
1 JAN 2017
612.9 USD Billion
1 JAN 201834 times
Sources: coinmarketcap.com, ICO Launch Group
Bitcoin included

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Altcoin Crypto Market Capitalization
Crypto Market
2.2 USD Billion
1 JAN 2017
376.2 USD Billion
1 JAN 2018171 times
Sources: ICO Launch Group
Bitcoin excluded

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Unit: USD Billion
Crypto 1-Jan-17 1-Apr-17 1-Jul-17 1-Oct-17 1-Jan-18
Bitcoin + Altcoins 17.7 25.9 100 147.9 612.9
Altcoins 2.2 8.5 59 75.9 376.2
Altcoins (%) 12.7% 32.7% 59.0% 51.3% 61.4%
Crypto Market
Market Capitalization

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Crypto Rises and Falls
• Blockchain technology
• Decentralized
• Immediate settlement
• Lower transaction fees
• Accessable to all
Why Does Crypto Work?

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Crypto Rises and Falls
Sources: coinmarketcap.com
Why Does It Crash?

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"It is known that the cryptocurrency is not backed by
anything. It cannot be a store of value. No material
valuables are behind it and it is not secured by
anything. It can be a settlement medium to a certain
degree and in certain situations."
President Vladimir Putin of Russia
Sources: TASS, Business Insider, Article: “Here are all the
theories explaining the crypto market crash” 17 Jan 2018
Crypto Rises and Falls
Why Does It Crash?

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• No material valuables behind it
• No “backing” from a government
Crypto Rises and Falls
Why Does It Crash?

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What Is ICO?
•Borderless new way of raising funds by leveraging cryptocurrencies
(mostly) via the Internet
•Fundraising mechanism in which new projects sell their underlying
crypto tokens without financial intermediaries
•Cost-effective machanism for decentralized fund raising that creates
benefits to issuer and investors
ICO Basics

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Major Parties in ICOs
Blockchain
TOKEN Issuer
Investors
Online
communications
Creation of
Token
Offering of
Token
THB, USD
ICO Basics

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Major Steps of ICOs
ICO Basics

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IPO, Crowdfunding and ICO
Important Factors IPO Crowdfunding ICO
Issuers Public Companies SMEs, Startups SMEs, Startups
Large Companies
Investors Public Angel Investors Blockchain investors
Documents Prospectus Memorandum of
Information and other
documents
White Paper
Timeframe (months) 12 or more 1 – 3 3 – 6
Costs High Moderate Low
Investment Channels Offline Online Online
ICO Basics

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Funds Raised by ICOs in 2017
Sources: ICO Launch Group
ICO Basics

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Top ICOs in 2017
Sources: ICO Launch Group
ICO Basics

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ICOs for Different Projects
Milk products Rental cars Renewable energy Casinos
Coffee Manufacturing Scholarships Tourism Agriculture
ICO Basics

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Its Contents
1.Introduction
2.General Concept
3.Business Model
4.Method of Payment
5.Payment Platform
6.Maintaining Stability
White Paper in Practice

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Its Contents
7.Token Sale
8.Project Timeline
9.Companies Profile
10. Founding Team
11. Advisory Board
12. Partners
13. Legal Disclaimers
White Paper in Practice

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Legal Issues for ICOs and Cryptocurrencies
No Specific Law
• As of 23rd
February 2018, Thailand has no specific law on ICOs and
cryptocurrencies
• Cryptocurrencies are not a “currency” under the Currency Act B.E. 2501
• Cryptocurrencies may be regulated as a new type of securities, i.e.
“Investment Participation”

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Legal Issues for ICOs and Cryptocurrencies
Relevant Laws and Regulations
• Public fraud under Section 343 of the Penal Code
• Emergency Decree on Borrowings Which Are Public Fraud B.E. 2527 as
amended
• Anti-Money Laundering Act B.E. 2542 as amended
• Consumer Protection Act B.E 2522 as amended
• Computer Crime Act B.E. 2550 as amended

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Legal Issues for ICOs and Cryptocurrencies
Relevant Laws and Regulations
• Electronic Transactions Act B.E. 2544 as amended
• Securities and Exchange Act B.E. 2535 as amended
• Financial Institutions Act B.E. 2551
• BOT Newsletter dated 18th
March 2014, re Bitcoin and Altcoins
• BOT Notice to Financial Institutions dated 12th
February 2018, re
Cryptocurrency

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Legal Issues for ICOs and Cryptocurrencies
Regulators and Enforcement Authorities
• MOF
• BOT
• SEC
• SET
• AMLO
• DSI

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SEC Proposed Regulatory Approach
Future Regulations for ICOs

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Sources: SEC
ICOs which SEC may
regulate as “Investment
Participation”
ICOs and Securities
Future Regulations for ICOs

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“Initial Coin Offering is the offering process of digital tokens, where
rights of digital token holders are specified in a digital form with
automatic enforcement of contract, and the registration of token
holders is done digitally”.
Definition of ICOs
Future Regulations for ICOs
Sources: SEC Public Consultation Papers

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• instruments representing rights, divided into units, each with highly
standardized terms and conditions
• issued for raising funds from the public
• holders have rights to participate in pooled benefits from pooled
contributions
• contributions are collectively managed
• investors have no control over day-to-day operation of issuer
Sources: SEC
Future Regulations for ICOs
Investment Participation

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• does not include existing types of securities under Sections 4 of the
Securities and Exchange Act B.E. 2535
• does not include instruments representing rights pursuant to an
agreement in a contract where the rights are primarily for consumption
or usage of assets or services.
Sources: SEC
Future Regulations for ICOs
Investment Participation

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Sources: SEC
• Objective / nature of the project
• Business model and business plan
• Type / legal structure of entity running the project
• Team members / advisors
• Key risks and legal issues
Future Regulations for ICOs
White Paper Minimum Disclosures

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