Thai bank SCBX scraps offer for 51% stake in Bitkub due to unresolved regulatory compliance issues

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

In a press release signed by Chief Executive Officer Arthid Nanthawithaya, SCBX said that while the issues are not beyond repair, the uncertain timeframe in which they will be resolved is a deal breaker. The termination of the share purchase transaction was mutually agreed.

“While the due diligence results did not reveal any significant abnormal issues that are unrecoverable, Bitkub is currently in the process of resolving various issues in accordance with the recommendations and orders of the [SEC]Thailand, who are uncertain about the timeframe for resolving these issues.” publication.

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

The move is part of the transformation from a traditional bank to a broader digital presence. Despite the Bitkub deal that would have expanded the bank into blockchain and digital assets, SCBX says it remains committed to moving 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 that will play an important role in Thailand’s economy and financial industry,” the company said.

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

Bitkub’s tussle with Thailand’s digital asset regulations

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

However, it continues to struggle with a number of SEC regulatory compliance issues. The local Bangkok Post news agency reported back in May reported that the SEC’s Criminal Fining Committee slammed 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 met all of the securities regulator’s criteria for listing digital assets.

Meanwhile, SCB’s about-face comes after Thailand’s central bank enacted new regulations to prevent commercial banks from investing everything in digital assets.

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