Siam Commercial Bank (SCBX) has canceled its plan to purchase a 51% stake, worth an estimated $500 million, in Bitkub. The lender reached 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 Chief Executive Officer Arthid Nanthawithaya, SCBX stated that while the issues are not irreparable, the uncertain timeframe in which they will be resolved was a deal breaker. The termination of the shares purchase deal was agreed on mutually.
“Whilst the results of the due diligence exercise did not reveal any significant abnormal issues which are irremediable, Bitkub is currently in the process of resolving various issues as per the recommendations and orders of the [SEC], Thailand, which are uncertain in terms of timeframe in resolving those issues,” according to the release.
SCBX added that it recognizes the potential and talents of the exchange and hopes for many opportunities for cooperation in the future. SCBX, Thailand’s largest bank, initiated the bid in November last year through its subsidiary SCB Securities (SCBS).
The move is part of its restructuring from being a traditional bank to having a broader digital footprint. Despite the Bitkub deal, which would have expanded the bank into the blockchain and digital assets space, the SCBX says it is still committed to developing in this direction.
“SCB X Public Company Limited and SCB Securities Co., Ltd. remain committed to their strategic plans to expand into businesses relating to blockchain technology and digital assets, which will play an important role in Thailand’s economy and financial industry,” the company said.
SCBX is not new to the blockchain and digital assets space. It has a subsidiary, SCB 10X, that operates as a blockchain and digital assets-focused venture capital firm with investment in firms like Ripple, BlockFi, and Alpha Finance.
Bitkub’s tussle with Thai digital assets 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 assets transactions being funneled through it.
However, it has continued to battle with a series of regulatory compliance issues from the SEC. Back in May, local news outlet Bangkok Post reported that SEC’s Criminal Fining Committee slammed five members of the exchange’s digital asset selection committee for non-compliance with the regulator’s listing rules when it began trading its native KUB token.
However, the exchange has denied the allegation, stating that it complied with all the securities regulator’s digital asset listing criteria.
Meanwhile, SCB’s U-turn comes after the Thai central bank released new regulations to limit commercial banks from going all in on investing in digital assets.
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