Thailand’s oldest bank is unable to acquire the country’s largest domestic cryptocurrency exchange due to strict crypto regulations.
As reported by Cointelegraph in November 2021, SCB X Group, a subsidiary of Siam Commercial Bank (SCB), is set to acquire a 51% stake in Bitkub by the second quarter of 2022 as part of a plan to become a regional fintech company. Now things seem to have taken a turn, as the bank has indefinitely postponed its plans to acquire the popular exchange.
As cryptocurrency trading continues to be hampered by regulations, SCB X has decided indefinitely not to proceed with a $487 million bid for a 51% stake in Bitkub, the main cryptocurrency exchange in Thailand.
According to a report by Nikkei Asia on Thursday, SCB’s parent company, SCB X, told the Stock Exchange of Thailand (SET) that the acquisition is “still subject to due diligence”. A senior SCB X official told the outlet that the team did not know when the deal would be closed.
The news of the rescheduling was revealed earlier this month when SCB X sent a letter to SET explaining the current situation. In a statement, SCB X CEO Arthid Nanthawithaya said:
At present, the matter is in the process of due diligence and discussion with regulatory bodies. Therefore, the period for completing the deal has now been extended.”
Thailand is one of the most advanced crypto countries in Asia, where merchants are given tax breaks and a regulated market for cryptocurrency exchange. Regardless, many cryptocurrency exchanges, including Binance and Huobi, have previously struggled with the guidelines of the country’s regulatory restrictions.
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Earlier this year, the Bank of Thailand and the Securities and Exchange Commission (SEC) recently announced stricter regulations on cryptocurrency and usage restrictions to ensure that cryptocurrencies can only be traded as assets on authorized platforms. The news came as global cryptocurrency prices plummeted and dented crypto trading optimism, dashing Bitkub’s aspirations to increase its customer base.
On July 2, the Securities and Exchange Commission (SEC) imposed civil penalties on Bitkub Capital Group Holdings Chairman Sakolkorn Sakavee for creating trading volume data. He was fined $216,000 (8 million baht) and banned from management roles at the company for a year.