Siam Bank Terminates Stake Acquisition Deal With Crypto Exchange Bitkub

Thailand’s oldest bank, Siam Commercial Bank (SCBX), will no longer follow through with its plans to acquire a 51% stake (over $500 million) in local crypto exchange Bitkub.

Coinfomania reported last November that SCBX had purchased a majority stake in Bitkub. The acquisition was meant to help the bank “create a long-term growth in value” as well as to “elevate Bitkub to a global level.” 

The purchase deal worth about $537 million was expected to be finalized within the first three months of 2022 as the Thailand-based financial institution said it was still awaiting regulatory approval from the country’s Securities and Exchange Commission (SEC) at the time.

Bitkub Has Pending Issues With the SEC

On Thursday, SCBX noted that the investment deal it made with Bitkub last year had been terminated due to regulatory issues between the exchange and Thailand’s regulators.

The Thai bank revealed that it had conducted a due diligence exercise and carefully inspected Bitkub, but found no abnormal issues with the company. However, the trading platform needs time to settle the regulatory problems it has with the Thai Securities and Exchange Commission (SEC), hence the need to cancel the deal.

“…although the due diligence does not indicate a significant irregularity that cannot be resolved, Bitkub still has pending issues that need to be concluded in accordance with the Securities and Exchange Commission’s recommendations and orders. There is still uncertainty about the timing of such conclusions. As a result, the buyer and the seller have agreed to cancel this share purchase transaction…effective from August 25, 2022,” the bank said. 

Crypto Regulations in Thailand

Meanwhile, Thailand relaxed some of its cryptocurrency tax obligations earlier this year. Although citizens are not completely banned from owning cryptocurrencies and/or providing crypto-related services, Thailand is known for occasionally enforcing strict regulations to govern the use of the digital asset class in the country.

But in April, the Southeast Asian country exempted crypto traders on licensed exchanges from paying a value-added-tax (VAT) of seven percent. The government also implemented tax breaks for those who invest their funds into startups, making it possible for citizens that invest in startups for two years or more to stop paying taxes for 10 years.