Thailand’s oldest bank is unable to acquire the country’s largest local cryptocurrency exchange due to strict cryptocurrency regulations.

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As Cryptooshala reported in November 2021, SCB X Group, a subsidiary of Siam Commercial Bank (SCB), was due to acquire a 51% stake in Bitkub by the second quarter of 2022 as part of a plan to become a regional fintech. Now, things seem to have changed, as the bank has indefinitely shelved its plans to acquire the popular exchange.

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With cryptocurrency trading still hampered by regulation, SCB X has decided indefinitely not to advance a $487 million offer for a 51% stake in Bitkub, Thailand’s main cryptocurrency exchange platform.

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According SCB’s parent company SCB X told the Stock Exchange of Thailand (SET) that the acquisition is “still undergoing due diligence”, according to a report from Nikkei Asia on Thursday. A senior SCB X official told the publication that the team does not know when the deal will be finalized.

The news of the postponement was revealed earlier this month when SCB X sent a letter to SET outlining the current situation. SCB X CEO Artid Nantavitai said in a statement:

“Currently, the issue is in the process of due diligence and discussions with regulators. Thus, the closing date for the transaction has now been extended.”

Thailand is considered one of the most progressive crypto nations in Asia, where traders are provided with tax incentives and a regulated market for exchanging cryptocurrencies. Despite this, many cryptocurrency exchanges, including Binance and Huobi, have previously struggled with regulatory restrictions in the country.

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Earlier this year, the Bank of Thailand and the Securities and Exchange Commission (SEC) recently announced stricter rules and restrictions on the use of cryptocurrencies to ensure that cryptocurrencies can only be traded as assets on licensed platforms. The news comes as global cryptocurrency prices plummeted and further undermined optimism about cryptocurrency trading, robbing Bitkub of its drive to grow its customer base.

On July 2, the SEC imposed civil sanctions on Bitkub Capital Group Holdings Chairman Sakolkorn Sakavi for manipulating trading volume data. He was fined 8 million baht and banned from holding senior positions in the firm for a year.