Thailand’s oldest banking group will not proceed with a deal to acquire Bitkub Online, the country’s leading cryptocurrency exchange, both companies announced on Thursday.
SCB X, the parent company of the kingdom’s fourth-largest bank, Siam Commercial Bank, would have acquired 51% of Bitkub shares at a price of THB 17.8 billion (USD 496 million). The deal pegged Bitkub’s valuation at THB 35 billion (USD 1 billion), making it Thailand’s second unicorn.
Conditions in cryptocurrency markets have deteriorated since the deal was announced in November. That month, the market capitalization of all cryptocurrencies reached USD 3 trillion, but it then lost USD 2 trillion by June.
SCB notified the Stock Exchange of Thailand of the deal’s termination on Thursday, citing regulatory action faced by Bitkub in recent months.
“Whilst the results of the due diligence exercise did not reveal any significant abnormal issues which are irremediable, Bitkub is currently in the process of resolving various issues as per the recommendations and orders of the Securities and Exchange Commission, Thailand, which are uncertain in terms of timeframe in resolving those issues,” SCB X said in the SET notice.
Bitkub said in a statement that its business operations were not impacted by the deal’s termination.
The once-promising deal would have given SCB an early lead in Thailand’s crypto market as low interest rates and nonperforming loans depress profits for Thai banks.
Bitkub reported a net gain of THB 5 billion in 2021. In November, its 24-hour turnover was USD 253 million, but that has since fallen to USD 40.4 million, according to CoinMarketCap.
The Securities and Exchange Commission ordered the exchange to improve its technical infrastructure after service outages were caused by rapid growth in transactions. In May, Bitkub faced a fine for violating the SEC’s criteria on digital asset listings.
The two companies had aimed to finalize their deal by the first quarter of this year. Silence from both sides on the deal in recent months led to speculation that SCB was using Bitkub’s regulatory woes to lower the acquisition price.
Bitkub Capital Group founder and CEO Topp Jirayut Srupsrisopa was still optimistic about the deal when he spoke with Nikkei Asia in July, while a senior official from SCBX said the deal was indefinitely delayed.
“I still believe in our vision to make history by becoming a new national champion for Thailand, to usher the Thai economy into the world of the future, and for Thailand to become the region’s financial and technology hub,” Topp wrote on social media on Thursday.
SCB said it would continue to expand into the blockchain and digital asset business despite the deal’s dissolution, according to the SET notice.