Thailand’s Securities and Exchange Commission on Friday approved a joint venture between Binance and Gulf Energy Development to operate a digital asset exchange and brokerage, granting the cryptocurrency giant its first license in Southeast Asia.
Operations will launch in the fourth quarter of 2023 as a 51-49 joint venture between Gulf Innova and Binance. The former is the fintech arm of Gulf Energy, one of Thailand’s largest private power producers, which invested USD 20 million for a 0.4% stake in Binance’s US operation.
“By harnessing Binance’s expertise together with Gulf’s established local presence and network, Gulf Binance aims to showcase the full potential of blockchain technology to meet the needs of Thai users,” said Richard Teng, regional head of Asia at Binance.
The arrival of Binance, the world’s largest cryptocurrency exchange by trading volume, will likely shake up Thailand’s digital asset market. Local exchange Bitkub had grown its share to a dominant 75.4% after No. 2 exchange Zipmex faced a liquidity crunch from the Terra Luna crash in the middle of 2022.
Thai digital asset exchanges saw a 79% drop in trading volume last year during a crypto winter that ultimately felled global exchange FTX, Binance’s rival.
This is the seventh exchange and brokerage license granted by the regulator.
Teng said that Thai users “can expect access to a trusted and regulated service that prioritizes user security alongside compliance with local regulations” from Binance.
Binance’s “compliance first” approach in Thailand was a reversal from previous tactics that triggered warnings from financial authorities in the US, UK, Japan, and Singapore. It set up a local office in Thailand under Gulf’s auspices last year, a rarity for a company that frustrated regulators with its lack of a physical headquarters.
Binance also acquired Japan’s Sakura Exchange in December, giving it a licensed operation in another Group of Seven economies after France and several US states.
In Cambodia, it has entered a joint venture with the conglomerate Royal Group to explore Web3 projects and signed an agreement with Cambodian authorities to help develop a legal framework for digital asset regulation.
The digital asset operator license comes at a critical time for Gulf, whose 2022 agreement with Binance was a bid to diversify its holdings. Shares in Thai power companies have been on a downturn since the May 14 election victory of the Move Forward Party, which has pledged to restructure power pricing to cut household bills.