Siam Commercial Bank’s parent company had been planning to acquire the Bitkub exchange, which is the biggest crypto exchange in Thailand. However, the company has now postponed its intention of buying a majority stake in the exchange because the country has recently tightened its crypto regulations, which will limit growth in terms of domestic crypto trading.
Acquisition deal delayed
SCB X, the company that owns the Siam Commercial Bank, had been planning on acquiring a 51% stake in Thailand’s largest crypto exchange, Bitkub, for a cost of 17.85 billion BAHT. The oldest lender in the country announced that it has now indefinitely postponed the deal, as regulatory authorities in Thailand are working to inhibit the growth of crypto trading.
According to an unnamed senior official of the company, they had informed the Stock Exchange of Thailand (SET) that they were still doing their due diligence. He said that they did not have any idea of when the deal would be signed. Earlier in the month, SCB X had also informed the SET that they were still in discussions with regulatory bodies about the matter and they had extended its completion period.
The deal’s announcement
Last year in November was the first time when SCB X had first disclosed its intention of acquiring a stake in the company. SCB Securities, the brokerage subsidiary of the company, had to be used for conducting the transaction. This plan was part of the company’s strategy to become a fintech player globally. It had been expected that the deal would go through in the first quarter of the year.
Bitkub had held the unicorn status at that point because the company’s valuation had been about 35 billion baht. Back in February, the Securities and Exchange Commission (SEC) and the Bank of Thailand had announced some tough regulations for the crypto industry, which prompted the delay in the deal.
According to the new rules, cryptocurrencies can no longer be used in payments and are meant to ensure that they can only be traded on platforms that have a license to provide their services in the country. Furthermore, the slump in the crypto market also reduced hopes that Bitkub would be able to expand its user base.
In addition, Sakolkorn Sakavee, the chairman of Bitkub Capital Group Holdings, was also sanctioned at the beginning of the month. The accusation filed against the chairman includes fabricating information about the crypto exchange’s trading volume. A fine of 8 million baht was imposed on Sakavee and he is not permitted to take executive positions for about a year.
Due to the restrictive and tough crypto regulations that have been introduced in Thailand, Bitkub has been making efforts to shift its offices to Vietnam. According to Sakolkorn, the country has a friendlier crypto climate for businesses. Last spring, the crypto exchange also partnered with a startup in Vietnam for launching Kubtech, which is a private blockchain operator. It is expected that it would become a platform for trading digital assets.