SEC Threatens Zipmex License Revocation Over Liquidity Issues

The Securities and Exchange Commission (SEC) may revoke Zipmex’s business license if the digital asset exchange operator fails to resolve its liquidity issues within 15 days, given that its capital fund falls short of regulatory requirements.

The SEC has directed Zipmex to revise its operations, as the company struggles to maintain the necessary capital fund and suffers from an ineffective management structure, posing a risk to its customers.

Within a 15-day period, Zipmex must submit a report to the SEC detailing the progress made in addressing its liquidity challenges, in compliance with the Digital Asset Business Operations Act of 2018.

On November 25, 2023, the SEC mandated Zipmex to rectify its financial status to meet capital fund requirements. By December 8, Zipmex reported its inability to comply.

A decision made at an SEC board meeting on January 11 required Zipmex to revise its operational inefficiencies, partly attributed to insufficient staffing, within a 15-day timeframe.

Zipmex is now required to ensure that its capital fund meets regulatory standards, to restructure its management, and to hire competent personnel for effective business operations.

Zipmex must also implement safeguards to prevent the misuse of customer deposits, which includes maintaining individual accounts with accurate and up-to-date information for each customer.

Anek Yooyuen, SEC deputy secretary-general, warned that failure to adhere to Section 35 of the Digital Asset Business Act 2018 could lead to the revocation of a digital asset business’s license.

The SEC emphasizes the importance of regular monitoring of business operators, requiring daily reports on customer assets to ensure compliance with regulatory standards.

The SEC recently directed More Return (MORE) to provide details by January 17 about a shareholder meeting scheduled for Friday to discuss an increase in registered capital, with this information to be disclosed through the Stock Exchange of Thailand’s system.

MORE is planning an extraordinary shareholders’ meeting on January 19 to consider increasing its registered capital by approximately 1.07 billion baht from the current 359 million baht.

Under this plan, MORE aims to issue over 21.53 billion new common shares at a par value of 0.05 baht each, raising the registered capital to 1.43 billion baht.

These new shares will be offered to existing shareholders (rights offering) for up to 14.35 billion shares, and to support the exercise of warrant rights for purchasing approximately 7.18 billion ordinary shares.

Investor complaints received by the SEC are focused on the shareholders’ meeting, particularly regarding the impact on existing shareholders due to the capital increase and the unclear purposes of this raise.