Thailand’s Securities and Exchange Commission (SEC) has taken action against cryptocurrency exchange Zipmex, revoking its operating licenses after months of regulatory scrutiny.
In an announcement, SEC revealed that Zipmex can no longer function as a digital asset exchange and broker for cryptocurrencies in Thailand, effective from 28 May 2024.
The move comes after the SEC had previously ordered Zipmex to suspend its services to Thai users in February until it rectified its financial position and operational deficiencies. However, the exchange failed to comply with these directives, leading to the revocation of its licenses.
According to the SEC, Zipmex is now obligated to return assets to its clients or carry out any requests made by the clients themselves. In the event that clients fail to notify their requests or claim their assets, Zipmex must deposit the unclaimed assets in a trusted and secure system.
“If any clients do not notify their requests or claim their assets, Zipmex must deposit the unclaimed assets in a trusted and secure system and must report its proceedings, step by step, to the SEC without delay,” SEC stated.
Zipmex Under Regulatory Scrutiny Since 2022
Zipmex has been under scrutiny by the SEC since the cryptocurrency market downturn in 2022. The exchange faced an investigation relating to its acquisition by V Ventures and allegations of operating in Thailand without regulatory approval.
In response to regulatory pressure, Zipmex suspended trading in November 2023, citing the intention to comply with regulations.
Originally licensed by the Thai SEC in 2020, Zipmex encountered financial difficulties and filed for debt relief in 2022, reportedly owing customers $97 million.
As part of its restructuring efforts, the exchange proposed to offer creditors $0.0335 per dollar for initial claims as of November 2023. However, the revocation of its operating licenses adds further uncertainty to the future of Zipmex and its ability to navigate the challenges ahead.
Earlier this year, Thai’s SEC charged Akarlap Yimwilai, the former CEO of Zipmex Thailand, with corruption and deception.
At the time, the SEC’s investigation revealed that customer assets held in Zipmex Thailand’s Z Wallet were transferred to overseas digital wallets without prior disclosure of changes in the platform’s terms and conditions.
Thailand Emerging As A Major Crypto Hub
Thailand has solidified its position as a key destination for offshore digital asset investors, despite some past controversies. Just recently, the country’s Finance Ministry announced the exemption of value-added tax (VAT) on digital asset trading.
The decision eliminates the requirement to pay 7% VAT on income derived from cryptocurrency and digital token trading, providing a favorable environment for investors and traders.
The VAT exemption, which took effect in January this year, has no specified end date, offers a long-term incentive for participants in the digital asset space.
EXPLORE: What are Bitcoin ETFs? A Beginner’s Guide
In another development, Thailand’s SEC granted approval to One Asset Management (ONEAM) to launch the country’s first spot Bitcoin exchange-traded fund (ETF).
The newly approved fund, known as ONE Bitcoin ETF Fund of Funds Unhedged and not for Retail Investors (ONE-BTCETFOF-UI), is set to be distributed between May 31, 2024, and June 6, 2024.
Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
