Thailand’s oldest lender has pulled out of a $500 million deal to buy cryptocurrency exchange Bitkub, which had been on hold since July.
According at ReutersSCBX, the parent company of Siam Commercial Bank, made the decision because the startup needed time to resolve regulatory issues.
Regulatory issues for Bitkub
The group said, “Bitkub is currently in the process of resolving various issues pursuant to the recommendations and orders of the Securities and Exchange Commission (SEC), which are uncertain in terms of the timeline for resolving these issues.”
The SCBX group announcement plans to buy 51% of Bitkub last November as part of a major digital strategy.
Arthid Nanthawithaya, CEO and Chairman of the Executive Committee, said the stock market has grown rapidly in popularity over the past few years and predicted that it would grow even more in the long run.
“Moving [acquisition] is in line with SCBX Group’s strategy to become a financial technology group, responding to new consumer needs and entering a new competitive arena that will emerge very rapidly in the next three to five years,” said Nanthawithaya.
However, the parties have now agreed to end the transaction despite due diligence on the company uncovering no unusual issues.
Thailand’s SEC gets vigilant
Last month, the banking giant said the deal’s completion period was being extended as part of ongoing talks with regulators.
It was after the SEC imposed civil penalties against Sakolkorn Sakavee, chairman of Bitkub Capital Group Holdings, for falsifying information about the exchange’s digital asset trading volume.
Despite the fallout from the deal, the bank said it was “committed to strategic plans to grow in businesses related to blockchain technology and digital assets.”
Meanwhile, the SEC issued a statement this week warning investors to exercise caution when engaging in decentralized finance (DeFi) transactions, citing the risks and the fact that they are unregulated.
According to the SEC, DeFi services and investments are becoming increasingly popular, especially DeFi which provides deposit and lending services.
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