Speculation grows on BX bowing out
Stringent regulations and imminent market saturation could be the main factors prompting the forthcoming closure of Bitcoin Co Ltd (bx.in.th), Thailand's largest digital asset exchange, say local operators of digital asset exchanges.
"BX may be worried about providing customer information and trading information to the Securities and Exchange Commission [SEC] on a daily basis," said Poramin Insom, founder of Satang Corporation Co Ltd.
"The SEC does cross-check for prices of digital asset transactions every day."
Authorised digital asset exchanges are required to disclose high-value transactions to the SEC and the Anti-Money Laundering Office.
Bitcoin Co may not want to submit to such stringent reporting, and there could be additional regulations for digital asset exchanges to comply with in the future, said Mr Poramin.
Additional regulations could stifle Bitcoin Co's competitiveness against foreign digital asset exchanges vying to operate in Thailand legally, he said.
Higher competition in the domestic digital asset industry may have encouraged the company's exit because it may think the industry's peak has passed and market saturation is anticipated, said Mr Poramin.
Launched in 2013, Bitcoin Co is among the pioneers of cryptocurrency trading in Thailand, starting from small-scale trading and reaching a zenith when the price of bitcoin peaked in 2017.
The company on Monday announced it will cease its operations at the end of this month "to focus on other business opportunities".
Such announcement prompted panic-selling, igniting a price slump for digital assets traded on the exchange, ranging from 2-60%.
No one from Bitcoin Co has come out to clarify the closure decision.
Attempts by the Bangkok Post to contact founder and chief executive David Barnes were unsuccessful.
SEC IT adviser Bhume Bhumiratana recently said Bitcoin Co's decision to cease its business operations could be because it does not want to be involved with regulated digital asset transactions, which could be inconvenient for some customers.
Jirayut Srupsrisopa, co-founder and chief executive of Bitkub Capital Group Holdings Co Ltd, said Bitcoin Co's closure announcement seems to be based on the basis of commercial operations as the company may see a decline in future profit with higher competition and imminent market saturation.
The country's largest digital asset exchange may also see higher growth opportunities overseas, said Mr Jirayut.
"The SEC's regulatory framework has good intentions to protect retail investors. On the other hand, higher costs will fall on digital exchange operators as they have to enhance their security and operating systems to meet regulatory standards," he said.
Customer support and IT security are unlikely to be reasons for Bitcoin Co's closure announcement, said Mr Jirayut.