Zipmex, the embattled cryptocurrency exchange, has arranged to discuss fines of nearly 11 million baht imposed on the company and its chief executive by the Securities and Exchange Commission (SEC), saying talks with potential new investors are ongoing.
Zipmex Thailand chief executive Akalarp Yimwilai said on Tuesday the company is awaiting an official letter from the SEC after the regulator announced the fines on its website.
According to the SEC statement, Mr Akalarp was fined 5.82 million baht for seven violations, while Zipmex Thailand was fined 5.156 million baht for six violations.
"The company is aware of the penalties for misconduct that appeared in the media and is now waiting for an official letter from the SEC," he told the Bangkok Post.
Mr Akalarp is accused of violating Section 94 of the Digital Assets Decree, with seven cases between Sept 15, 2021 and May 7, 2022 when Zipmex held customers' digital assets in a digital asset custodian programme.
"The company does not separate the property under maintenance in such a way that it can be identified beyond doubt as the property of the client, and it may use such digital assets for other purposes," the SEC statement said.
Zipmex Thailand is also accused of operating outside the digital asset business regulations without permission from the SEC by persuading its customers to use Singapore-based Zipmex Pte.
"Between May 8 and July 20, 2022, it appears that Zipmex did not have in place a system to effectively prevent conflicts of interest in such matters and the business operation does not have an adequate risk control system," noted the SEC.
Zipmex did not report a summary of the assignment to other persons as a service provider for business operations for 2022 within the specified period, in accordance with the criteria.
The SEC's settlement committee has imposed daily fines until Zipmex complies with the law.
"Since Jan 1, 2022, Zipmex has not provided policies, measures and procedures for assigning other persons to perform tasks related to the digital asset business that did not comply with the announced criteria," said the SEC.
The regulator also said Zipmex did not disclose information necessary for making a decision to use the service or make an investment decision between April 7 and July 20 last year.
"Zipmex did not fully disclose information about the reinvestment of customers' assets and ZipUp+ programme risks, including conflicts of interest and Zipmex's relationship with Zipmex Asia Pte Ltd and Zipmex Pte," said the statement.
Zipmex was also fined for violating sections 30 and 31 of the Digital Assets Decree.
"Zipmex, as a digital asset business operator, digital asset exchange and digital asset brokerage, does not have policies, measures and practices for assigning other people to be the operators of work related to digital asset business operations, which is not in accordance with the rules set forth in the announcement," the SEC said.
"Zipmex acknowledged the wrongdoing as notified by the SEC and arranged to discuss the matter internally in terms of fines," Mr Akalarp said.
Regarding ZipUp+, a platform service in Singapore, he said this involved customers agreeing to deposit money voluntarily.
"We want to confirm the company is not abandoning customers and is trying to do its best on this part," said Mr Akalarp.
He said Zipmex will officially report the progress of negotiations with new investors in the next 2-3 days, as well as disclose the company's future plans.
Mr Akalarp said a new cycle of investment in cryptocurrency has returned, with Bitcoin prices expected to peak again within the next 18 months.
"The same goes for gold as the US dollar weakens. The slowing period for crypto lasted a long time, but the upward cycle will start again shortly," he said.