The company that owns Siam Commercial Bank in Thailand has postponed a deal to buy the majority of Bitkub, the largest cryptocurrency exchange in the nation. The choice was made in the midst of tightening cryptocurrency regulations that are preventing domestic crypto trading from expanding.
A 17.85 billion baht ($487 million) bid by Siam Commercial Bank’s parent company, SCB X, to acquire 51% of Bitkub, Thailand’s largest cryptocurrency exchange, has been postponed. The deal has been postponed indefinitely by the bank, the country’s oldest lender, because Thai regulations continue to stifle the growth of the cryptocurrency market, according to a report by Nikkei Asia, which quoted the financial group.
An unnamed senior official at the SCB X is quoted as saying, “We have made it clear in our statement to the Stock Exchange of Thailand (SET) that the deal is still undergoing due diligence.” “We don’t know when the deal will be sealed,” he added. Earlier in July, the company notified the SET that the matter is still being discussed with regulatory bodies and that its completion period had been extended.
In November of last year, SCB X first declared its intent to buy a stake in Bitkub. The intended channel for the transaction was SCB Securities, its brokerage subsidiary. The strategy was a component of the group’s overall effort to dominate the local fintech market. By the first quarter of 2022, it was anticipated that the deal would be finalized. Bitkub was considered a unicorn at the time and valued at 35 billion baht ($1.05 billion).
The delay came after a February announcement of stricter cryptocurrency regulations by the Securities and Exchange Commission (SEC) and Bank of Thailand. The new regulations restricted their use in transactions and aimed to ensure that they could only be traded on platforms authorized in the nation. Meanwhile, the crypto market slump also dimmed hopes that Bitkub could expand its customer base.
Speaking to Nikkei, Secretary General of the Thai Digital Asset Association Nares Laopannarai commented:
Let me put it this way, I think the tight regulations are quite unfriendly to crypto trade and limit the growth of crypto trading to less than we expected.
What’s more, in the beginning of this month, the SEC imposed sanctions on Bitkub Capital Group Holdings’ Chairman Sakolkorn Sakavee. He was accused of fabricating information regarding the trading volume of digital assets on the exchange. Sakolkorn was fined 8 million baht ($218,000) and banned from executive positions in the company for a full year.
In response to the increasingly stringent regulations in Thailand, Bitkub has tried to relocate to Vietnam. Sakolkorn noted that the destination has a much friendlier crypto business climate. This past spring, Bitkub joined forces with a Vietnamese startup to launch a private blockchain operator called Kubtech. The latter is expected to soon become a trading platform for digital assets.