Thailand Plans to Tighten Crypto Oversight, Giving Central Bank More Powers to Regulate Digital Assets

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Thai SEC approves four crypto firms despite Zipmex woes

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Thailand’s regulators are still approving crypto companies despite one of its largest ones suspending withdrawals.

Thailand’s financial regulator, the Securities and Exchange Commission (SEC), has approved four more crypto companies in the Kingdom.

On Aug. 4, it was reported in local media that the SEC had granted operating licenses to four more digital asset operators.

These include Krungthai XSpring, a crypto broker affiliated with one of the country’s leading banks, and crypto exchange T-BOX Thailand. Also winning regulatory approval was crypto advisor and fund manager Coindee and Leif Capital Asset Management, which also manages funds.

The four firms have yet to commence operations, however, as the regulator still needs to inspect their operations.

Thailand now has 21 fully regulated digital asset operators comprising nine exchanges, nine brokers, and three fund managers. Thailand’s military-backed government has been largely tolerant of cryptocurrencies despite the central bank’s efforts to restrict them.

The report noted that another major player is waiting to enter the burgeoning Thai crypto market. Gulf Innova and Binance Capital Management aim to launch the jointly owned “Gulf Binance” crypto exchange and brokerage.

Crypto volumes in Thailand surged almost 600% in early 2021 as the bull market was building momentum.

The move comes amid turmoil regarding the Singaporean exchange Zipmex, which also operates in Thailand. Late last month, Zipmex Thailand suspended withdrawals for customers in the country using its ‘Z Wallet.’ Shortly after, the SEC launched a hotline for Zipmex customers to submit details on their losses.

On Aug. 1, the SEC launched an investigation into Zipmex, claiming the company may have violated trading rules by suspending withdrawals. It stated that the firm cited inadequate reasons for such actions as “market fluctuations.”

The regulator ordered the firm to resume trading operations, and by August 3, Zipmex had resumed withdrawals for Solana (SOL) and Ripple (XRP) the following day, as reported by Cointelegraph. Withdrawals of larger assets such as Bitcoin and Ethereum remain suspended, as are withdrawals from its ZipUp+ service.

On Aug. 4, the firm tweeted that it was committed to resuming all services asap.

We are committed to resuming all services on the Zipmex platform ASAP and to rebuild confidence and alleviate customer concerns.

To read more, click https://t.co/J7IVjWsq6N pic.twitter.com/tfZ4lhjXVf
— ZIPMEX (@zipmex) August 4, 2022

Zipmex was caught up in this year’s crypto contagion due to its exposure to Celsius and Babel Finance. On Aug. 3, Zipmex Thailand CEO Akalarp Yimwilai said that its parent company in Singapore had injected $5 million to compensate for the Celsius losses.

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After weeks of rumors, Thai crypto exchange Zipmex files for debt relief in Singapore

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Bankruptcy

It appears the firm's fortune took a turn to the worst via its exposure to troubled crypto lending service Babel Finance.

In a document dated Wednesday, July 27, Thai cryptocurrency exchange Zipmex said that its solicitors in Singapore, Morgan Lewis Stamford LLC, filed five moratorium applications, or legal authorization to debtors to postpone payment, under Section 64 of Singapore’s Insolvency, Restructuring and Dissolution Act 2018 on behalf of the company. Zipmex seeks to protect itself against third party actions, claims, and proceedings for a period of six months while the filing is active. The announcement came just one week after its CEO and co-founder Marcus Lim publicly denied the firm was facing financial troubles. Rumors have been circulating in the past month that the cryptocurrency exchange was insolvent after a proposed acquisition by Coinbase fell through.

Additionally, Zipmex already filed for credit relief last Friday but did not disclose the act until Wednesday. All of its subsidiary entities, consisting of Zipmex Asia Pte Lt, Zipmex Pte Ltd, Zipmex Company Limited, PT Zipmex Exchange Indonesia and Zipmex Australia Pty Ltd, were included in the filing. Furthermore, Zipmex says that a case conference regarding the filing has been scheduled for 4 pm UTC Friday and that creditors had just until the deadline of 10 am Thursday to inform solicitors that they wished to attend.

It appears that Zipmex's fortunes took a turn for the worst after the collapse of Hong Kong-based crypto lender Babel Finance. As told by Zipmex:

"The moratoriums would give the Zipmex Group the breathing space and time it requires to explore options to resolve the liquidity situation (including to pursue the recovery against Babel Finance), and to formulate a restructuring plan and secure additional investment to secure the Zipmex Group’s operations moving forward."

Zipmex claims that it's in the advanced stages of securing new investments to relive its liquidity crisis. Currently, Thailand's Securities and Exchange Commission is asking affected investors to register complaints against the firm on its official site.

Editor's Note: The article has been updated to reflect that Zipmex submitted moratorium application, but is not in the procedures of bankruptcy.

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Zipmex resumes withdrawals for trade wallets

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Business

The crypto exchange said it had $48 million in exposure with Babel Finance and $5 million with Celsius — both firms faced liquidity and insolvency issues, respectively.

Cryptocurrency exchange Zipmex has resumed withdrawals from its trade wallet after two days, but said transfers, deposits and trade will continue to be disabled from its Z Wallet.

In a Friday announcement, Zipmex said its Thailand-based users could make withdrawals from its trade wallet, with the function expected to be “re-enabled this evening” for clients in other countries. The crypto exchange has had withdrawals disabled since Wednesday, citing a "combination of circumstances" beyond its control, including the recent market volatility.

“Ever since the black swan events surrounding the crypto space Zipmex has retrieved the majority of our funds and assets that were historically deposited with our deployment partners and have been actively working to resolve the situation for the remaining outstanding assets,” said Zipmex. “There were no materially adverse impacts to our operations.”

Important Announcement

Maintenance on the Trade Wallet has ended. Withdrawals for your Trade Wallet are now enabled as of 22 July 2022 at 18:00 (GMT+7).

Transfer from Z Wallet, deposit and trade will continue to be disabled until further notice. pic.twitter.com/voMInELlH5
— ZIPMEX (@zipmex) July 22, 2022

Cointelegraph reported on Wednesday that, according to a person close to the exchange, Zipmex had roughly $100 million in exposure to crypto lender Babel Finance, which was at risk of default. The Hong Kong-based firm halted withdrawals in June, citing "unusual liquidity pressures."

However, according to Zipmex, the exchange only has $48 million in exposure with Babel and $5 million with Celsius, which may also be facing insolvency. Zipmex said it was in discussions with Babel to resolve the situation and was “actively engaging” with Celsius:

“Our exposure to Celsius was minimal, as such, we were intending to write this off against our own balance sheet.”

Zipmex offers services for users in Thailand, Indonesia, Singapore and Australia. Cointelegraph reported in August 2021 that the exchange’s user base had reached 200,000 with more than $1 billion in gross transaction volume since its launch in 2019.

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Digital asset platform Zipmex partners with Visa in Asia Pacific

August 6, 2021 Coin Telegraph

Asia

Visa is continuing to extend its integration with regulated crypto companies worldwide.

Asia-Pacific crypto-fiat trading platform Zipmex has forged a strategic partnership with Visa in a bid to improve the convenience of its payment programs and products.

The platform's payment network ZipSend, designed to enable users to spend their crypto, will be integrated into Visa’s worldwide network of 70 million merchants. Following the partnership, Zipmex aims to release a Visa-branded payment card later this year.

Zipmex, which has compliant operations in Thailand, Indonesia, Singapore and Australia, currently has a user base of over 200,000 and has reported over $1 billion in gross transaction volume since its launch in late 2019. The company has noted that any future payment product, such as a card, will still need to get the green light from the regulatory authorities in the relevant jurisdictions.

Zipmex CEO Marcus Lim has said that the platform’s bid to become a crypto payment card issuer has placed it in a position “to provide support and guidance to help regulators pass effective digital asset legislation. This has been one of the more fulfilling aspects of this project.”

As reported, crypto exchange and payment service provider Crypto.com has also inked a global partnership with Visa and has rolled out its card in multiple regions, including Asia-Pacific. In July, Visa announced that its crypto-enabled cards had processed more than $1 billion in total spending during the first half of 2021 alone.

With central bank digital currencies and private sector stablecoins drawing ever more attention from a legal and geopolitical perspective, both Visa and its rival Mastercard have been vying to ensure their services remain at the center of the latest developments in the digital asset space.

Visa’s CEO has this year argued that stablecoins’ blockchains could be thought of as payment rails similar to RPT or ACH networks. Mastercard has for its part announced recent partnerships with Circle, Paxos, Evolve Bank & Trust and others on a joint project to enable banks and crypto firms to roll out crypto cards that can be used anywhere that Mastercard is accepted.

The company has also recently announced a new startup engagement program as part of Mastercard Start Path to support fintechs and companies working with digital assets, crypto and blockchain technology.

On the consumer front, Coinbase announced this week that users with a Visa or Mastercard debit card linked to Apple Pay can now purchase crypto assets on its platform, with Google Pay integration to follow.

zipmex

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