The company that owns Siam Commercial Bank in Thailand has delayed a deal to acquire a majority stake in Bitkub, the country’s largest cryptocurrency exchange. The decision comes amid tighter crypto regulations that limit the growth of crypto trading in the country.
SCB defers acquisition of Thai crypto exchange Bitkub
SCB X, the parent company of Siam Commercial Bank, has postponed its 17.85 billion baht ($487 million) bid to acquire 51% of Bitkub, the largest crypto exchange in Thailand. The bank, the kingdom’s oldest lender, postponed the deal indefinitely as Thai regulations continue to hamper the growth of crypto trading, Nikkei Asia reported, citing the financial group.
“We clarified in a statement to the Stock Exchange of Thailand (SET) that the deal is still under due diligence,” an unnamed senior SCB X official was quoted as saying.” We do not know when the deal will close,” he added, adding that in early July the company had informed SET that the matter was still under discussion with regulators and that the completion date had been extended.
SCB X first announced its intention to acquire a stake in Bitkub last November. The deal was to go through the company’s securities subsidiary, SCB Securities. The plan was part of the group’s strategy to become a regional fintech player. The transaction was to be completed by the first quarter of 2022. At the time, Bitcab was valued at THB 35 billion ($1.05 billion), giving it unicorn status.
The delay follows the Bank of Thailand and the Securities and Exchange Commission’s (SEC) announcement in February that they would tighten regulations on cryptocurrencies. The new rules were intended to restrict their use in payments and allow them to be traded only on domestically licensed platforms. Meanwhile, the downturn in the crypto market has also dampened hopes that Bitkub could expand its customer base.
According to Nikkei, Nares Laopannarai, secretary general of the Thai Digital Assets Association, commented:
Let me put it this way, I think the strict regulations are quite unfavorable for crypto trading and will limit the growth of crypto trading less than expected.
Additionally, earlier this month, the SEC imposed sanctions on Bitkub Capital Group Holdings Chairman Sakolkorn Sakavee. He was accused of fabricating information on the volume of digital assets traded on the exchange; Sakolkorn was fined 8 million baht ($218,000) and barred from holding an executive position in the company for one year.
With increasingly strict regulations in Thailand, Bitkub sought to relocate to Vietnam, a destination Sakolkorn noted was a much friendlier crypto business environment. This 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.
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