This post from the operator of a Bitcoin exchange in Thailand has got some attention at the Reddit Bitcoin forum. I have posted a comment at that Reddit link discussion. This post is based on that comment.
First off, let’s just copy the last paragraph of the original post here:
At the conclusion of the meeting senior members of the Foreign Exchange Administration and Policy Department advised that due to lack of existing applicable laws, capital controls and the fact that Bitcoin straddles multiple financial facets the following Bitcoin activities are illegal in Thailand:
- Buying Bitcoins
- Selling Bitcoins
- Buying any goods or services in exchange for Bitcoins
- Selling any goods or services for Bitcoins
- Sending Bitcoins to anyone located outside of Thailand
- Receiving Bitcoins from anyone located outside of Thailand
If true, these would be some rather sweeping restrictions. For the very least they would serve to show that the recent guidance by the American regulator FINCEN is much less restrictive, even if it is not without problematic aspects.
This is an interesting test case. Let’s look at it in some detail:
Obviously, something can’t be illegal because there is no law. To make some act or other illegal, you need a law that says so. This is common sense, but also a principle of international human rights law.
Article 11, Paragraph 2, Universal Declaration of Human Rights:
(2) No one shall be held guilty of any penal offence on account of any act or omission which did not constitute a penal offence, under national or international law, at the time when it was committed.
Article 39 of the Thai Constitution gives the same guarantee.
Since a “lack of laws” can’t make Bitcoin illegal, that leaves “capital controls”.
I have no idea what the Thai law on capital controls may be. But capital controls generally restrict the international flow of funds.
Therefore, it may possibly violate such a statute to transfer funds using Bitcoin from Thailand to another country, bypassing the controls. The last two acts in the list above might qualify.
However, most of the acts described as illegal in the post don’t necessarily involve moving funds into or out of the country.
It will be interesting to see how this plays out. Again, it is an excellent test case.