Thailand’s oldest bank is unable to acquire the country’s largest local cryptocurrency exchange due to stringent crypto regulations.
As reported by Cointelegraph in November 2021, SCB X Group, a subsidiary of Siam Commercial Bank (SCB), was set to acquire a 51% stake in Bitkub by the second quarter of 2022 as part of a plan to become a regional fintech. Now things seem to have taken a twist, as the bank has indefinitely postponed its plans to acquire the popular exchange.
As crypto trading continues to be hampered by regulation, SCB X has indefinitely decided not to move forward with a $487 million offer for a 51% stake in Bitkub, Thailand’s major cryptocurrency exchange platform.
According to a report by Nikkei Asia on Thursday, the parent company of SCB, SCB X, informed the Stock Exchange of Thailand (SET) that the acquisition is “still undergoing due diligence.” A senior official of SCB X told the outlet that the team doesn't know when the deal will be sealed.
The news of the reschedule was revealed earlier this month when SCB X submitted a letter to SET outlining the current situation. In a statement, SCB X CEO Arthid Nanthawithaya said:
“Presently, the matter is in the process of due diligence and discussion with the regulatory bodies. Therefore, the completion period of the transaction is now extended.”
Thailand is regarded as one of Asia’s most progressive crypto nations, with traders granted tax breaks and a regulated market for cryptocurrency exchanges. Regardless, Many cryptocurrency exchanges, including Binance and Huobi, have previously struggled with regulatory restrictions guidelines in the country.
Earlier this year, the Bank of Thailand and the Securities and Exchange Commission (SEC) recently announced stricter cryptocurrency regulations and usage limitations to ensure that cryptocurrencies can only be traded as assets on licensed platforms. The news came as global crypto prices plummeted and damaged crypto trading optimism, even more, dashing Bitkub's aspirations of increasing its client base.
On July 2, the SEC imposed civil penalties on Bitkub Capital Group Holdings Chairman Sakolkorn Sakavee for making up trading volume data. He was fined $216,000 (8 million baht) and banned from managerial roles in the firm for a year.