Bitkub investigated by Thai regulator in ‘wash trading’ case

abdelaziz Fathi

Thailand’s Securities and Exchange Commission has targeted Bitkub over allegations of inaccurate reporting and wash trading on its cryptocurrency platform.

A regulatory notice dated September 27 indicates that SEC is taking legal action against the country’s largest crypto exchange and two individuals, alleging they were involved in “creating artificial volumes of digital assets” on the platform.

In its order, the commission said authorized agents of Bitkub sought to intentionally give the appearance of inflated trading interest by placing matching buy and sell orders through a prohibited practice called wash trading, where trades are executed without transferring ownership of an asset.

In addition to a monetary penalty of more than $600,000, the watchdog seeks a six-month trading prohibition for the defendants, Anurak Chuachai, and Sakon Srakawee.

This was the third time the Thai securities regulator has taken action against Bitkub. Last month, it hit its CFO Samret Wajanasathian with a $235,000 fine for insider trading. Three months earlier, Bitkub paid another $65,000 fine for non-compliance with its digital asset listing rules.

SEC has also issued improvement orders for Bitkub and other Thai cryptocurrency exchanges after users were blocked from trading during significant price spikes in 2021.

Perhaps the biggest setback to Bitkub was when Thailand’s oldest lender, Siam Commercial Bank, cancelled its plan to acquire a 51% controlling stake in the cryptocurrency exchange for roughly 18 billion baht ($500 million).

The deal to buy a majority stake in Bitkub has been already stuck in due diligence more than 10 months since the bid was originally unveiled back in November 2011. The deal had valued Bitkub at more than $1.0 billion, making it the latest unicorn in a country once seen as barren in terms of startups.

Siam Commercial Bank cited concerns over Thai regulators’ clampdown on crypto exchanges, including Bitkub. The country’s Securities and Exchange Commission (SEC) ordered the cryptocurrency exchange earlier this year to halt accepting new clients until it proves its platform is able to accommodate trading activities of its existing customers.

The current rules also require crypto exchanges to share the information of users with regulators, whenever funds are transferred between firms, to curtain a growing number of illicit activities stemming under the guise of the global cryptocurrency industry.

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