Siam Commercial Bank's purchase of crypto exchange Bitkub stalled

Siam Commercial Bank's purchase of crypto exchange Bitkub stalled

The Bitkub booth at Thailand Crypto Expo 2022 at the Bitec Bangna exhibition hall on May 12, 2022. (Photo: Arnun Chonmahatrakool)
The Bitkub booth at Thailand Crypto Expo 2022 at the Bitec Bangna exhibition hall on May 12, 2022. (Photo: Arnun Chonmahatrakool)

A deal to sell a majority stake in Thailand’s largest crypto exchange to the nation’s oldest bank remains stuck in due diligence more than eight months after the plan was unveiled, according to the platform’s co-founder.

The proposal with SCB X Plc that helped propel Bitkub Online Co into a so-called unicorn has yet to be wrapped up, according to Jirayut Srupsrisopa, chief executive officer of Bitkub Capital Group Holdings. 

“I can’t mention about the deal publicly yet because it’s under the due-diligence process,” Mr Jirayut said in an interview with Bloomberg TV on Monday. “But everything is still in the same timeline. That’s all I can mention about the deal.”

Bangkok-listed SCB X, the parent of Siam Commercial Bank Plc, agreed to acquire 51% in Bitkub Online for 17.9 billion baht ($490 million) in November. The lender, which has signalled ambitions of becoming a regional provider of fintech services, has also cited due diligence as a reason for the delay. 

The global crypto ecosystem has struggled with the meltdowns of several digital tokens, several bankruptcy filings and debt restructurings -- all of which have prompted heightened scrutiny from regulators. The Thai unit of crypto exchange Zipmex recently halted customer withdrawals and filed for moratorium from creditors. 

Bitkub has also been subject to greater regulatory oversight, with the Securities and Exchange Commission (SEC) slapping a 24 million baht fine on the company and two officials for violating trading rules. Mr Jirayut said the fine hasn’t affected the company.

“No investor was affected by that practice and we have been measuring the daily active users and it hasn’t affected the company much,” he said. “Actually Bitkub controls almost 100% of the market now,” with many Thai traders having migrated their business in the wake of Zipmex’s troubles.

Bitkub’s coin is down about 85% from its all-time high and was at about $2.60 on Monday, according to CoinGecko.

The government is looking to tighten regulations to bolster oversight on crypto firms and ring-fence small investors from the volatile asset, SEC Secretary-General Ruenvadee Suwanmongkol said in an interview last month.  

“Our main focus will be to provide more protection for small investors, some of whom are putting most of their savings into these assets,” Ms Ruenvadee said.  

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