Thailand’s SCB Scraps Bitkub Takeover Deal Citing Regulatory Issues

25 August 2022, 15:30 GMT+0000
Updated by Geraint Price
25 August 2022, 15:30 GMT+0000
In Brief
  • Bank terminates $500 million deal to buy cryptocurrency exchange Bitkub.
  • The lender stated that the platform required time to resolve regulatory issues.
  • Last year, the SCBX Group announced that would purchase 51% of Bitkub.
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Thailand’s oldest lender has pulled out of a $500 million deal to buy cryptocurrency exchange Bitkub, which had been delayed since July.

According to Reuters, SCBX, the parent company of Siam Commercial Bank, took the decision as the startup needed time to resolve regulatory issues.

Regulatory troubles for Bitkub

The group said: “Bitkub is currently in the process of resolving various issues as per the recommendations and orders of the Securities and Exchange Commission (SEC), which are uncertain in terms of time frame in resolving those issues.”

The SCBX Group announced plans to buy 51% of Bitkub last Nov as a part of a major digital strategy.

Arthid Nanthawithaya, CEO and Chairman of the executive committee, said that the exchange has grown rapidly in popularity over the last few years and predicted it would grow even more in the long run. 

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“The move [acquisition] is in line with SCBX Group’s strategy to upgrade to a financial technology group, meeting new consumer needs and entering a new competitive arena that will emerge very quickly in the next three to five years,” Nanthawithaya had said.

However, the parties have now agreed to terminate the transaction despite due diligence on the company discovering no unusual issues. 

Thai SEC grows vigilant

Last month, the banking giant said that the completion period of the deal was being extended amid ongoing discussions with the regulators. 

This was after the SEC imposed civil penalties on Sakolkorn Sakavee, chairman of Bitkub Capital Group Holdings, for falsifying information about the exchange’s trading volume of digital assets.

Despite the fallout from the deal, the bank said it was “committed to strategic plans to expand into businesses relating to blockchain technology and digital assets.”

Meanwhile, the SEC issued a statement this week warning investors to exercise caution when engaging in decentralized finance (DeFi) transactions, citing risks and the fact that they are not regulated. 

According to the SEC, DeFi services and investments are becoming increasingly popular, particularly DeFi which provides deposit-taking and lending services.

Disclaimer

BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.