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Thailand’s Oldest Lender Delays Bitkub Exchange Acquisition Amid Tighter Crypto Rules

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The company that owns the Thai commercial bank Siam has postponed a deal to acquire a controlling stake in Bitkub, the country’s largest cryptocurrency exchange. The decision comes amid tightening cryptocurrency regulations that are limiting the growth of domestic cryptocurrency trading.

SCB Postpones Acquisition of Thai Crypto Exchange Bitkub

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Siam Commercial Bank’s parent company, SCB X, has shelved a 17.85 billion baht ($487 million) bid to acquire 51% of Thailand’s largest cryptocurrency exchange, Bitkub. The bank, which is the kingdom’s oldest lender, has postponed the deal indefinitely as Thai regulations continue to curb the growth of cryptocurrency trading, Nikkei Asia reported, citing the financial group.

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“In our statement to the Stock Exchange of Thailand (SET), we made it clear that the deal is still undergoing due diligence,” an unnamed senior SCB X official said. “We don’t know when the deal will go through,” he added. Earlier in July, the company notified SET that the matter was still under discussion with regulators and that the deadline had been extended.

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SCB X first announced its intention to acquire a stake in Bitkub last November. The deal was to go through its subsidiary brokerage SCB Securities. The plan was part of the group’s strategy to become a regional fintech player. The transaction was expected to be completed by the first quarter of 2022. At the time, Bitkub was valued at 35 billion baht ($1.05 billion), giving it unicorn status.

The delay follows the announcement by the Bank of Thailand and the Securities and Exchange Commission (SEC) of tightening regulations for cryptocurrencies in February. The new rules restrict their use in payments and aim to ensure that they can only be traded on platforms licensed in the country. Meanwhile, the downturn in the cryptocurrency market has also clouded hopes that Bitkub will be able to expand its customer base.

Speaking to the Nikkei, Thai Digital Assets Association Secretary General Nares Laopannarai commented:

Let me put it this way: I think the tight rules are very unfavorable for crypto trading and limit the growth of crypto trading less than we expected.

Moreover, earlier this month, the SEC sanctioned the chairman of Bitkub Capital Group Holdings, Sakolkorn Sakavi. He was accused of fabricating information about the volume of trading in digital assets on the stock exchange. Sakolcorn was fined 8 million baht ($218,000) and banned from holding senior positions in the company for a full year.

In response to the tightening of regulations in Thailand, Bitkub tried to move to Vietnam. Sakolkorn noted that this place has a much more favorable climate for crypto business. Last spring, Bitkub joined forces with a Vietnamese startup to launch a private blockchain operator called Kubtech. The latter is expected to soon become a trading platform for digital assets.

Do you think Siam Commercial Bank will complete the deal to acquire a controlling stake in Bitkub? Share your expectations in the comments section below.

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Credit : news.bitcoin.com

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