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Thailand Regulators Tighten Crypto Rules in Wake of Trading Irregularities

9 Sep, 20224 min readRegulation
Thailand Regulators Tighten Crypto Rules in Wake of Trading Irregularities

The regulators in Thailand are about to make stringent rules following the irregularities and failure of a significant acquisition involving crypto exchange. The country’s dream of being a leading trading center for digital assets in South Asia has taken a step back.

In 2018 Thailand implemented laws on digital assets, making it the first country in the region to do so. This move attracted a flock of millennials to invest in cryptocurrencies. Crypto exchange platforms such as Bitkub Capital Group Holdings Co. and Zipmex Thailand, along with four other exchange firms, were given the license by the Securities and Exchange Commission.

Jirayut Srupsrisopa, the CEO and founder of Bitkub, became a pop icon with his frequent appearance on TV shows and on YouTube, with his face on highway billboards.

Amidst the current crypto winter and market conditions, the SEC fined Bitkub 8.5 million baht ($233,459) for insider trading last month and a police complaint against Zipmex and its CEO earlier this week has made the market more unsettled. To improve the supervision of digital assets and investor protection, the SEC is planning a working group.

According to experts, the tumble in Bitcoin, Ethereum, and other tokens, along with the bankruptcy of Celsius Network Ltd., broker Voyager Digital Ltd., and Three Arrows Capital hedge fund, has been major contributors to the country’s decision to come up with stringent regulations.

The secretary-general of the Thai Digital Asset Association, Nares Laopannarai, said that “negative headlines” about the market have demotivated the crypto investors and market players. It would be difficult to “restore the excitement in the market” after the regulations are increased, considering the market has already gone through a lot of turmoil.

In August, there were 246,000 active trading accounts in Thailand, which is about one-third fewer than the tally in January.

Impact of Market Volatility in Thailand

SCB X Pcl, a financial group that has Thailand’s royal family as a major shareholder, had a plan worth 18 billion baht to buy a majority of Bitkub Online but had to scrap it due to the exchanges’ ongoing issues with regulators.

Kari Boonlertvanich, executive vice president of Kasikornbank Pcl, said that the decrease in digital-asset prices has “wiped out a vast amount of wealth among Thai investors.” People will be terrified for some time once they realize the bubble-price risk.

According to SEC data, the trading of crypto in the licensed exchanges in Thailand plummeted to 64 billion baht in August, the least since December 2020.

Thai companies have also faced losses due to their venture into crypto. The shares of Jasmine Technology Solution Pcl saw a decrease of more than 80 percent after their peak in April, after the company increased its investment in Bitcoin mining. It is currently the worst-performing stock among global telecommunications equipment companies this year, whereas it was the world leader in 2021.

Despite this, there are a few companies that are still betting on crypto markets’ growth. Gulf Energy Development Pcl, the biggest private power producer in Thailand, has doubled down on its plan to expand into digital assets to expand its earnings. S

Sarath Ratnavadi, the second-richest person in Thailand, controls the company and is seeking licenses from SEC to operate a digital asset exchange and brokerage in a partnership with Binance Holdings Ltd, the largest crypto-exchange in the world.

Yupapin Wangiwar, the chief financial officer of Gulf Energy, said that there is potential in crypto and digital assets as blockchain technology is growing at a rapid pace across the globe, in an interview last month. “Tokens with underlying assets will compliment the transformations of most companies.”

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