The Ministry of DES recently held a meeting to research ways to prevent cybercrime and forex market scams. (Reuters photo)
Authorities and regulators are stepping up efforts to prevent financial fraud, especially online scams, with measures ranging from closing legal loopholes to using advanced technology.
Finance Minister Arkhom Termpittayapaisith last week instructed the Securities and Exchange Commission (SEC) and the Bank of Thailand to look into any legal loopholes to prevent another Ponzi-like forex scheme from happening. .
He said the case of the Forex-3D exchange group, which allegedly deceived thousands of victims out of 2 billion baht, highlights legal loopholes that need to be addressed.
The Department of Special Investigations (DSI) opened a channel for people to file complaints in the Forex-3D case in late 2019, before the case hit the limelight recently when some celebrities allegedly played a part in it. scam.
Mr Arkhom said neither the SEC nor the central bank had ignored the Forex-3D case, but were reviewing the legalities and alerting the public to the dangers.
However, this matter does not fall under the supervision of the SEC as required by Thai law, he said.
In a statement released last week, the SEC explained that it does not have the power to oversee the foreign exchange industry. The regulator oversees the exchange and the trading of corporate bonds and digital currency tokens. It also monitors related companies committing unfair practices, within the scope of powers and duties prescribed by law.
Among these laws are the Securities and Exchange Act, the Derivatives Act, the Royal Decree on the Business of Digital Assets, the Provident Fund Act and the Trust Act for Transactions in Capital Market.
The SEC said the foreign exchange law requires foreign currency transactions to be made with entities approved by the Treasury Department. So far, no licenses have been issued to natural or legal persons who are not banks or financial companies allowing them to trade foreign currencies.
Once the SEC receives a whistleblower complaint about dishonest behavior by a person or corporation that is not a business operator under their supervision, the SEC will list the names in the ” Investor Alert” on its “SEC Check First” website and app.
The regulator said it will also issue public statements to remind the public to exercise caution when investing.
The commission also conducts a thorough investigation of the facts when the matter is under SEC supervision.
Know the law
The Bank of Thailand has agreed that for forex trading, people should only engage in transactions with parties approved by the Ministry of Finance.
The bank reiterated that the ministry has not authorized anyone to trade currencies for investment, speculation or profit through any online platform or websites.
The central bank said that according to the DSI, alleged victims can file complaints against forex scams, based on the law on obtaining loans by deceiving the public, defrauding the public and computer crimes.
Although none of the lawsuits in the Forex-3D case are related to the laws applied by the central bank, the central bank is fully cooperating with the relevant authorities by providing them with related information according to their requests, Alisara Mahasandana said. , Deputy Governor of the Financial Markets Operations Group. at the Bank of Thailand.
The central bank is working to maintain public alert on forex scams to prevent them from falling victim, she said.
According to one theory, the growing number of fraud cases are attributed to people forcing young people to open bank accounts for them so that fraudsters can use the accounts to deposit or transfer money they obtain from illegal transactions.
According to the central bank, young people can open bank accounts if they meet the banks’ age criteria. The regulator has asked all banks to closely monitor the financial transactions of young customers as they are seen as a group susceptible to scammers.
If banks discover suspicious transactions on accounts, they are urged to take prompt action, the central bank said. The Bank of Thailand said it was working closely with the relevant authorities to combat this crime.
According to the Royal Thai Police, the number of suspicious bank accounts in this category that banks sent to the Anti-Money Laundering Bureau for investigation rose from 6,211 in May to 14,369 in August.
The increase is attributed to authorities and financial institutions stepping up their efforts to track these accounts.
The central bank is warning people to ignore the benefits offered to them in exchange for opening a bank account for another person because the account opener could risk being arrested for breaking the law.
According to the central bank, people should not trust anyone who contacts them claiming to be government officials or bank employees who want to check a money trail, because real government officials or bank employees don’t would ever use such an approach.
Payong Srivanich, chairman of the Thai Bankers Association and chairman of Krungthai Bank, said banks usually discuss and share information with each other regarding financial fraud when such issues arise to prevent it from affecting the whole. of the banking sector.
Improving banks’ cybersecurity systems is key to preventing risks, he said.
Kattiya Indaravijaya, managing director of Kasikornbank (KBank), said the bank is monitoring transactions, especially on the mobile banking channel.
For new deposit account openings, the bank complied with Bank of Thailand regulations, she said. KBank closed irregular or fraudulent accounts to prevent possible fraud and protect customers from financial risk, Ms Kattiya said.
Banks share data with other banks or related agencies, helping the industry prevent problems, she said.
No Stone Unturned
Meanwhile, the Department of Digital Economy and Society (DES) recently convened a meeting with relevant state authorities and regulators to explore ways to prevent cybercrime and similar scams in the internet market. changes.
DES Minister Chaiwut Thanakamanusorn said the meeting determined that the ministry would use social listening tools to comb through the online world, collecting the names of any websites or social media platforms that appeal to people to invest in forex trading.
He said the ministry will forward this list to the central bank and the SEC to verify whether they are licensed operators. If they are found to be in violation of applicable laws, the department will seek a court order to shut them down, in accordance with the Computer Crimes Act.
The meeting also discussed a recent case of remote cell phone hacking. In this case, a scammer sent a link to a victim’s cell phone and tricked the victim into clicking the link.
Once the link was opened, the victim’s cell phone was remotely controlled by this scammer, allowing access to certain information that the scammer could use to transfer money from the victim’s account through the banking app victim’s motive.
Mr Chaiwut said the central bank had asked all commercial banks to upgrade their mobile banking systems so that they could stop this type of money transfer once the system discovered that such activity was being carried out by remote hacking.
Inability to follow
Ajarin Pattanapanchai, Permanent Secretary of the DES Ministry, said existing laws cannot keep pace with the dynamic digital economy, allowing fraudsters to prey on victims online, including through e-commerce and fakes. investments in assets.
Thailand is one of the most active countries for social media use and online shopping.
She said anyone can operate an e-commerce business without supervision, while e-marketplaces are not required to register or receive a license to operate.
The Electronic Transactions Development Agency (ETDA) is considered the only major agency that governs the e-commerce ecosystem in the country, Ms. Ajarin said.
The Electronic Transactions Act empowers the ETDA Board of Directors to step in and govern all companies deemed to have a profound impact on the economy or the public through their transactions.
The law seeks to strike a balance between regulating and promoting digital service businesses, she said.
The legislation gives the ETDA a role as a regulator as well as a digital business facilitator.
Ms Ajarin said she understood why the ETDA might be reluctant to use its full authority to oversee every company’s transactions online, as it would be a difficult task.
Most industries typically have their own regulators to monitor behavior, she said. The problem is that these regulators may not use their full authority to govern in the public interest, Ms Ajarin said.