SEC Investigates Crypto Exchange Zipmex Over Alleged Violations of Local Rules

• The Securities and Exchange Commission (SEC) of Thailand is probing the crypto exchange Zipmex to determine if it breached local rules when it offered certain digital-asset products.
• The SEC believes that Zipmex may have been operating as a „digital-asset fund manager without permission“ and has given the crypto exchange till 12 January to provide clarification on this matter.
• Zipmex is currently being acquired by V Ventures, which is a subsidiary of Thoresen Thai Agencies Pcl, for $100 million.

The Securities and Exchange Commission (SEC) of Thailand has launched a probe into the crypto exchange Zipmex to determine if it breached local rules when it offered certain digital-asset products. The SEC has noted that some of Zipmex’s activities may be in violation of the local digital asset business rules. The same was conveyed in a letter to Akalarp Yimwilai, the CEO of the crypto exchange.

At the centre of the SEC’s probe are Zipmex’s ZipUP and ZipUP+ programs, which have been offered to the exchange’s clients since October 2020. Both products were managed and operated by Babel Finance and allowed clients of the exchange to earn a return on their tokens.

The investigation comes at a rather crucial time for Zipmex. The Bangkok based crypto exchange is currently being acquired by V Ventures, which is a subsidiary of Thoresen Thai Agencies Pcl. The acquisition is reportedly worth $100 million and will give V Ventures a 90% stake in the crypto exchange. It is essentially a bailout for the exchange’s customers who have been struggling to get their funds ever since the exchange suspended withdrawals in July 2022.

The SEC has given Zipmex till 12 January to provide clarification regarding the matter. If found guilty of breaching local rules, the crypto exchange may face legal repercussions. It would also mean that the acquisition by V Ventures may not go through as planned.

The SEC’s investigation is yet another example of the Thai government taking a tough stance on digital assets. In December 2020, the Thai SEC had issued a warning to investors regarding the risks associated with digital assets. The regulator had also issued a cease and desist order against Zipmex in February 2020, which prompted the exchange to suspend its operations.

The Thai SEC’s investigation into Zipmex is a reminder of the importance of local regulations for cryptocurrency exchanges. It also highlights the need for exchanges to ensure that they are in compliance with all applicable laws. Though the outcome of the investigation is yet to be seen, one thing is certain: the crypto industry in Thailand is under increasing scrutiny.