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SCBX, the parent company of Siam Commercial Bank, is no longer pursuing a US$500 million deal to acquire Thailand-based cryptocurrency exchange Bitkub.
The deal to acquire 51% of Bitkub was announced in November 2021 as part of its growth strategy, but a regulatory clampdown on cryptocurrency exchanges appears to be the stumbling block. SCBX and Bitkub agreed to terminate the transaction despite due diligence on the company discovering no unusual issues, according to a Reuters report on Thursday.
“Bitkub is currently in the process of resolving various issues as per the recommendations and orders of the Securities and Exchange Commission (SEC), which are uncertain in terms of time frame in resolving those issues,” the group said.
The SEC previously issued improvement orders for Bitkub and other Thai cryptocurrency exchanges, after users were blocked from trading during significant price spikes in 2021. It also ordered it to halt accepting new clients until it proves the platform is able to accommodate trading activities of its existing customers.
SEC also imposed civil penalties on Sakolkorn Sakavee, chairman of Bitkub Capital Group Holdings, for falsifying information about the exchange’s trading volume of digital assets, Nikkei reported.
Last year, the regulator published a series of new regulations for crypto businesses, and recently issued new guidelines to govern custody of digital assets held by cryptocurrency operators.
Amid regulatory developments, Huobi, one of the world’s largest crypto exchanges, shut down its Thai platform on July 1, less than two years since its launch, after its license was revoked by the country’s crypto watchdog.