Thai bank SCBX drops bid for 51% stake in Bitkub due to unresolved regulatory compliance issues

Siam Commercial Bank (SCBX) has canceled plans to buy a 51% stake, worth an estimated $500 million, in Bitkub. The lender made its decision after a due diligence exercise revealed unresolved compliance issues raised by the Thai Securities and Exchange Commission (SEC) against the digital asset exchange.

In a press release signed by Managing Director Arthid Nanthawithaya, SCBX said that while the issues are not irreparable, the uncertain time frame in which they will be resolved was a deciding factor. The termination of the share purchase transaction has been mutually agreed.

“Although the results of the due diligence exercise did not reveal any irremediable significant abnormal issues, Bitkub is currently in the process of resolving various issues in accordance with the recommendations and orders of the [SEC]Thailand, who are uncertain in terms of timelines to resolve these issues,” according to the statement.

SCBX added that it recognizes the potential and talents of the exchange and hopes for many cooperation opportunities in the future. SCBX, Thailand’s largest bank, launched the offering last November through its subsidiary SCB Securities (SCBS).

The move is part of its restructuring from a traditional bank to a broader digital footprint. Despite the Bitkub deal, which would have expanded the bank into the blockchain and digital asset space, SCBX says it is still determined to expand in that direction.

“SCB X Public Company Limited and SCB Securities Co., Ltd. remain committed to their strategic plans to expand into businesses related to blockchain technology and digital assets, which will play an important role in the economy and the financial sector. Thai,” the company said.

SCBX is not new to blockchain and digital assets. It has a subsidiary, SCB 10X, which operates as a venture capital firm focused on blockchain and digital assets with investments in companies like Ripple, BlockFi and Alpha Finance.

Bitkub’s standoff with Thai digital asset regulations

Bitkub is one of only six licensed digital asset exchanges in Thailand. It is also the largest digital asset exchange in the Southeast Asian country, with a market share of over 90% of all digital asset transactions routed through it.

However, he continued to struggle with a series of regulatory compliance issues from the SEC. In May, local newspaper Bangkok Post reported that the SEC’s Criminal Fines Committee criticized five members of the exchange’s digital asset selection committee for failing to comply with the regulator’s listing rules when it began trading. its native KUB token.

However, the exchange has denied the allegation, saying it meets all of the securities regulator’s digital asset listing criteria.

Meanwhile, SCB’s U-turn comes after Thailand’s central bank issued new regulations to prevent commercial banks from investing entirely in digital assets.

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