Bitkub told to fix platform issues
Investor confidence dips on shutdown
published : 20 Jan 2021 at 06:30
newspaper section: Business
Thai cryptocurrency exchange Bitkub Online temporarily shut down its desktop trading platform on Tuesday following an order from the Securities and Exchange Commission (SEC) giving the company five days to fix issues with its platform which had crashed three times this month due to spikes in activity.
After being closed for 16 hours, its mobile application platform reopened for trading at 17.25.
The situation has raised fears among investors that they may lose their money if the site shuts down for good or cannot handle trading volumes, says an industry veteran who requested anonymity.
Bitcoin has skyrocketed this month, soaring to a record high of 1.26 million baht per trading value on Bitkub. This caused Bitkub's trading platform to crash three times this month alone, receiving heavy complaints about routine service interruptions.
Bitkub enjoyed a surge in retail investors' interest on its platform in the first two weeks of this month, with new investors flocking to capture some of the wild gains and the fear of missing out that proved too large to be supported by the current system.
Bitkub currently has a 97% share of the market based on volume of accounts and daily trading. On Jan 7, the exchange reported the total number of active trading accounts surged to about 800,000.
However, according to the market source who requested anonymity, Bitkub's total number of active accounts is much lower than the company's claim at around 300,000-400,000 accounts.
The discrepancy in figures suggests there are still plenty of new accounts that have not yet been verified through the know-your-customers (KYC) process and are thus unable to be used for trading on the platform.
The SEC recently received complaints from investors about Bitkub's trading system going down on Jan 2, Jan 3 and Jan 16, due to increased quantity of transactions on the exchange that coincided with the surging price of bitcoin and other cryptocurrencies.
Jirayut Srupsrisopa, chief executive of Bitkub Capital Group Holdings, said Bitkub has a 90% market share and is the top cryptocurrency exchange in Thailand.
Trading value on its platform surged from 200-300 million baht per day to highs of 1-2 billion per day.
The SEC's board meeting on Monday by virtue of Section 35 of the Emergency Decree on Digital Asset Businesses 2018 passed a resolution requiring Bitkub to submit a rectification plan to the SEC and complete the problematic work system solution within five days under the following conditions.
First, Bitkub must modify operation systems like trading, withdrawals and KYC to be more efficient and reliable even during times of high traffic.
Secondly, the firm must revise the customer acceptance policy to suit the work system. The company must run a service according to the service level agreement as agreed with the customer.
Third, it must solve the working system so that it can support its business continuity plan in case the trading system fails and must have a plan that corresponds to business models, customer volume and transaction volume.
Finally, the exchange must modify the implementation of the work system that helps strengthen and maintain the working mechanisms of the trading system.
However, after the SEC ordered the company to solve the trading and working system, Bitkub immediately closed its trading website.
Many investors are worried they may lose their deposits and assets that remain on the exchange.
Many traders on social media suggested investors move to other two digital exchanges, namely SatangPro, which still has thin trading volume and a bid-offer price gap, and Zipmex, which still has a few crypto coins listed for trade.
Some investors recommended foreign digital exchanges such as Binance that offer a wider choice of crypto coins but also pointed out that the price in baht is only available for peer to peer offerings that many Thai retail investors are not familiar with.
Poramin Insom, chief executive and co-founder of Satang Corporation, said the company is now improving its servers to boost the exchange's capacity to serve customers moving from Bitkub after the SEC's order.