Thailand Banking Giant Pulls Plug on Bitkub Acquisition Deal
Thailand’s oldest bank Siam Bank Commercial (SCB) has decided to end plans to acquire a stake in the country’s leading cryptocurrency exchange Bitkub, citing pending regulatory issues.
SCBx Ends Shares Transaction Deal With Bitkub
According to Reuters on Thursday (August 25, 2022), SCB’s holding company SCBx Group revealed in a statement that there were no “abnormal issues” found regarding Bitkub after carrying out due diligence, but the Thai financial institution will no longer purchase the majority shares in the exchange.
Both SCBx and Bitkub agreed to end the shares transaction, while the latter works on settling issues with Thai regulators. A statement from SCBX said:
“Bitkub is currently in the process of resolving various issues as per the recommendations and orders of the Securities and Exchange Commission, Thailand, which are uncertain in terms of timeframe in resolving those issues. As a result, the buyer and the seller have agreed to terminate the transaction.”
The deal between SCBx Group and Bitkub was first announced in November 2021. The group said it was planning to buy 51% of total shares in Bitkub, valued at around 17.85 billion baht (nearly $500 million).
At the time, Arthid Nanthawithaya, SCBx CEO and Chairman of the Executive Committee said:
“The move is in line with SCBx Group’s strategy to upgrade to a financial technology group, meeting new consumer needs and entering a new competitive arena that will emerge very quickly in the next three to five years.”
However, in July 2022, the deal was “indefinitely delayed” due to Thai regulators’ tightening on the local crypto industry. The transaction was supposed to be finalized by the first quarter of 2022 subject to approval from authorities like the Bank of Thailand and the Securities and Exchange Commission (SEC).
Thailand’s Relationship With Crypto
While there is an increased crypto adoption among Thai citizens, the government has issued warnings regarding the sector. As previously reported by crypto.news in March, the SEC banned the use of crypto as a payment means in Thailand.
According to the regulator, money laundering concerns, lack of robust crypto regulations, cyber theft, and price volatility were some of the reasons for the decision. However, the ban did not affect cryptocurrency trading.
The Thailand cabinet also relaxed tax rules for crypto investment, as a way to promote the growth of the industry in the country.
The new policy which was scheduled to take effect from April 2022 to December 2023, allows the exemption of value-added tax (VAT) of seven percent for trading on authorized crypto exchanges and also enables “traders to offset annual losses against gains for taxes due on cryptocurrency investments.”
Meanwhile, the Bank of Thailand (BoT) recently revealed that the central bank is not in a hurry to roll out a central bank digital currency (CBDC).
While the BoT said it would trial retail CBDC for the public in Q4 2022, there was no immediate need for a sovereign digital currency because of the presence of strong payment alternatives.
