Thailand: 5 firms face legal action over alleged illegal digital asset exchange activity

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Thailand’s Securities and Exchange Commission (SEC) has instituted legal action against five legal entities for their roles in illicit activity on virtual currency exchanges. The SEC’s press release disclosed that it is handling two matters, the first involving Bitkub and the second being local exchange Satang Corporation Co., Ltd.

In the first matter, the Civil Punishment Measures Committee (OCC) ordered Bitkub and its representatives Anurak Chuachai and Sakon Srakawee to pay a fine to the SEC totaling THB24,161,292 ($625,000) as compensation for the costs of investigating them. Anurak and Sakon were prohibited from trading virtual currencies for six months for their role in “creating artificial volumes of digital assets” on Bitkub.

The trio failed to comply with the demands of the OCC, which would have amounted to a settlement, leaving the SEC with no choice but to order the public prosecutor to sue the defaulters. If found guilty by the courts, Anurak and Sakon face a stern sentence and will be precluded from taking a seat as directors in any digital asset firm for up to 12 months.

A similar case was instituted in Bangkok against LLC Fair Expo and Mikalai Zahorski for creating artificial volumes of the Satang Corp. Both parties were offered terms of settlement amounting to THB12 million ($317,000) but turned it down. The SEC has since directed public prosecutors to handle the matter in addition to civil sanctions already imposed.

Wash trading or creating fake volume is an underhand tactic used by projects to lure traders into investing in an asset. Investors are fooled by the activity and believe that the asset is more popular than it really is.

Thailand’s SEC is on a roll

In recent weeks, the country’s chief security regulator has gone on a hot streak against the digital assets industry. The change of stance from the SEC stems from the bankruptcy claims of several local digital asset service providers in the country, like Zipmex.

The regulator had previously filed a report to law enforcement against Zipmex and its principal members for failing to forward necessary information about halting withdrawals to the commission. Riding on the wave, the commission imposed an outright ban on firms in the space from offering staking and lending services to prevent a recurrence of the Zipmex debacle.

The SEC has laid out new rules to govern the regulation of digital asset advertisements in the country. An official notice in early September ordered all advertisements to include a clear warning of the risks of investing in virtual currencies, as well as details involving celebrities, while associated costs should be forwarded to the SEC.

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