The company that owns Thailand’s Siam Commercial Bank has postponed a deal to acquire a majority stake in Bitkub, the country’s largest cryptocurrency exchange. This decision was made amid tightening crypto regulations, which limit domestic cryptocurrency trading growth.
SCB Postpones Acquisition at Thai Crypto Exchange, Bitkub
SCB X, the parent bank of Siam Commercial Bank has deferred a 17.85-billion baht ($487m) offer to buy 51% in Bitkub, Thailand’s biggest crypto exchange. The bank, which is the kingdom’s oldest lender, postponed the deal indefinitely as Thai regulations continue to inhibit growth of crypto trading, Nikkei Asia reported, quoting the financial group.
“We have made it clear in our statement to the Stock Exchange of Thailand (SET) that the deal is still undergoing due diligence,” an unnamed senior official at the SCB X has been quoted as stating. “We don’t know when the deal will be sealed,” he added. The company informed the SET earlier in July that it was still in discussions with regulators and that the completion time had been extended.
SCB X made the first announcement about its plans to purchase Bitkub shares in November of last year. SCB Securities was the broker that would handle the transaction. The plan was part of the group’s strategy to become a regional fintech player. It was anticipated that the deal would be finalized by the beginning of 2022. Bitkub, which was then valued at 35 billion Thai baht (1.05 billion), earned it the status of a unicorn.
After the Bank of Thailand and Securities and Exchange Commission announced in February that they had tightened regulations on cryptocurrency, the delay occurred. They were restricted in their use as payments and only allowed to be traded on countries licensed by them. Bitkub’s prospects of expanding its customer base were also reduced by the collapse in crypto markets.
Nikkei spoke to Nares, the secretary general of Thai Digital Asset Association Nares Lannarai.
Allow me to say this: I believe the strict regulations that are in place for crypto trades make it less friendly and limits the potential growth.
What’s more, in the beginning of this month, the SEC imposed sanctions on Bitkub Capital Group Holdings’ Chairman Sakolkorn Sakavee. According to the SEC, he was charged with fabricating data regarding trading volumes of digital assets. Sakolkorn was sentenced to 8 million baht (218,000 USD) and expelled from all executive roles for one year.
Bitkub tried to move to Vietnam in response to Thailand’s increasingly strict regulations. Sakolkorn pointed out that Vietnam has a more friendly crypto-business climate. Bitkub and a Vietnamese start-up teamed up to establish Kubtech, which is a private cryptocurrency operator. This latter will soon be a digital asset trading platform.
Is it possible that Siam Commercial Bank might eventually close the deal for Bitkub’s majority share? Comment below to share your hopes and fears.
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