Another Thai Bank Shuts Down Cryptocurrency Accounts

The state-owned Krungthai Bank has become the second financial institution after the Bangkok Bank to stop transactions that involved cryptocurrency trading with Thai Digital Asset Exchange (TDAX).

Another Thai Bank Shuts Down Crypto Accounts

The first was Bangkok Bank, which decided to terminate TDAX’s accounts with the bank last week.

According to Somchai Sujjapongse, the permanent secretary of the Finance Ministry and chairman of Krungthai Bank, it was him who ordered his bank to “to halt any transactions related to cryptocurrencies with TDAX through the bank’s accounts. The move followed a Bank of Thailand request that financial institutions cooperate by refraining from making or being involved in cryptocurrency transactions, as the regulatory framework supervising digital currencies remains unclear.”

At the moment, TDAX still has bank accounts with two other financial institutions: Kasikornbank (Kbank) and Siam Commercial Bank (SCB). Kbank confirmed last week that it was still providing its services to the exchange.

A source from another major cryptocurrency exchange, Bx.in.th (BX) was cited by the news outlet to have revealed that “Bangkok Bank has already terminated the exchange’s account, but did not reveal whether the termination occurred on the same day as TDAX’s termination.

Before the closing of its accounts, TDAX said they were preparing to launch some initial coin offerings (ICOs). Now the exchange had decided to announce the postponement of its ICO plans.

TDAX CEO and Founder Mr. Poramin Insom noted that “although there are five or six ICOs in the pipeline, the exchange has decided to impose a two-week postponement because market participants expect the SEC to unveil its ICO regulatory framework soon…We are waiting for the ICO regulations from the Thai SEC.”

A regulatory framework for cryptocurrencies is currently in the works. The government of Thailand is expected to establish it by March 8, to be followed by a Fintech bill.

Last Year ICO’s Were Supported by the Thai Government

We should still be aware, that not so long ago, in September last year, SEC  published its viewpoint on Initial Coin Offerings (ICO) and it said that they believed it was a positive thing.

As said in the official statement, ICO refers to a digital way of raising funds from the public. “In an ICO process, ICO issuer will offer digital tokens in exchange for cryptocurrency, such as Bitcoin or Ether. Since the digital tokens can diverge widely in design and representation, some may resemble financial returns, rights and obligations in similar ways to securities under the Securities and Exchange Act.

They, however, did express some concerns that in some cases ICO may be deliberately used as a tool for fraud or scam.

The SEC Thailand encourages access to funding for businesses, including high potential tech startups, and realizes the potential of ICO in answering startups’ funding needs. In cases where an ICO constitutes offering of securities, the issuer will need to comply with applicable regulatory requirements under the SEC Thailand’s purview. The SEC Thailand would like to advise any investor interested in investing in an ICO to seek to understand the benefits and risks associated with the ICO. In addition to general risks faced by startups, investors are exposed to heightened risks of price volatility, inadequate liquidity, cyber security, as well as potential fraud and scam.” they then added.

 

Teuta Franjkovic

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