(Bloomberg) -- Thailand plans to tighten supervision of digital-asset firms after a cryptocurrency selloff saddled retail investors with large losses and toppled several companies, the country’s top regulator said.

The Securities & Exchange Commission is looking to amend existing digital-asset regulations, most of which were approved in 2018, Secretary-General Ruenvadee Suwanmongkol said in an interview. Proposals include stricter qualifications for management and licensing of crypto custodians, she said without providing specific details.

“The extreme volatility of digital-asset prices has spurred the urgent need for improved supervision,” Ruenvadee said in an interview. “Our main focus will be to provide more protection for small investors, some of whom are putting most of their savings into these assets.”

Plans to boost oversight come as Zipmex (Thailand) Ltd., one of the country’s licensed cryptocurrency exchanges, and its regional parent this week halted withdrawals. They joined other crypto firms facing a liquidity crunch with the bankruptcy of Celsius Network Ltd. and and Three Arrows Capital. 

Trading of cryptocurrencies on Thailand’s licensed exchanges slumped to 58 billion baht ($1.6 billion) in June, the lowest since January 2021, according to SEC data. The total number of active trading accounts fell to 305,000 in June, from 556,000 in May, the data showed. A large proportion of traders of digital assets are “young investors,” Ruenvadee said.  

Zipmex Thailand’s woes are an individual case stemming from problems at a related business, Ruenvadee said. Overall, the digital-asset industry in the country remains sound and assets of investors using licensed platforms are protected by the regulator’s supervision, she said.

Still, Zipmex’s troubles underscore the perils of leveraged bets permeating in a closely interconnected industry between crypto exchanges, lenders, investors and hedge funds which has seen Celsius, Voyager and Three Arrows Capital file for bankruptcy.

Zipmex (Thailand) Chief Executive Officer Akalarp Yimwilai said Wednesday that the firm is in talks with potential investors to raise funds for a “bailout.”  

Thailand’s largest crypto exchange, Bitkub Online Co., and its CEO Sakolkorn Sakavee were fined by the SEC last month for creating “artificial trading volume” on the platform. The company and five officials were also fined in May for breaching guidelines in listing the company’s own digital coins. 

©2022 Bloomberg L.P.