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Thai SEC Sues Bitkub Crypto Exchange For Alleged Wash Trade

Thailand was the first in Southeast Asia to implement digital-assets regulations in 2018. The move attracted investors to cryptocurrencies. After that, however, the crypto industry started facing setbacks as regulators tightened rules during trading irregularities and the collapse of a top exchange.

On September 1, the SEC passed new digital advertisement rules. The rules refrain digital asset firms from presenting misleading information mandating them to include risks of investment products in adverts. Also, the firms received mandates to change all existing adverts to comply with the new rules within 30 days of notice issuance.

Thai regulators’ multiple law enforcement actions this 2022 are affecting the crypto market. The Thai Securities and Exchange Commission (SEC) activities caused a reduction in trading volume. Moreover, the number of active crypto accounts from the beginning of the year has reduced by 33%.

Bitkub, the largest digital currency exchange in Thailand, caught the Thai SEC’s attention this time. On September 27, the Thai Securities and Exchange Commission filed a lawsuit against Bitkub and two individuals.

Bitkub To Pay Fine Of $634,000 For Alleged Crypto Wash Trading

The SEC alleged the exchange and two others created artificial trading volumes on its platform to manipulate the market. In an official statement, the watchdog demands a civil fine of $634,000 against Bitkub and a two-month trading prohibition against the two individuals.

In July, BitKub Group Holdings’ Chairman was fined $216,000 and a one-year ban from performing executive roles in the company. The  SEC lawsuit makes it the second direct enforcement action on Bitkub this year.

Bitkub is one of the largest digital currency exchanges in Thailand, with millions of trading volumes daily. The firm operates a centralized system and currently has 75 coins and 75 trading pairs listed on its trading platform.

In the past months, Bitkub has been under regulatory pressure from the SEC. The chief technical officer of Bitkub, Samrat Wajanasathian, got fined 8,530,383 baht (approx. $234,000) in August. The Thai SEC alleged that Wajanasathian made an inside deal that dropped KUB by 101%.

Siam Commercial Bank Withdraws Plans For $500 Million Bitkub Funding

Bitkub experienced setbacks in August when Siam Commercial Bank canceled its plan for $500 million in Bitkub funding. Siam Commercial Bank is the oldest bank in Thailand and announced a plan to become the crypto exchange’s major shareholder in November 2021.

The Thai crypto industry was the world’s fastest growing because of its regulated crypto market and tax exemptions for traders.

Crypto market is hovering sideways on the chart | Source: Crypto Total Market Cap on TradingView.com

However, the clock hands have turned as crypto exchanges face difficult regulatory enforcement. Top exchanges like Huobi and Binance also face difficulty with regulatory enforcement.

The Thai SEC announced regulatory action against Binance in July 2021. The regulator launched a criminal investigation against the giant crypto exchange for allegedly operating without a license.

Featured image from Pixabay, Chart: TradingView.com

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