Super startup Bitkub suffers another setback with SEC order barring it from opening new accounts
The firm, led by dynamic CEO Jirayut Srupsrisopa, expanded by 1000% in 2020 and another 1000% in the opening weeks of 2021 reaching trading volumes as high as ฿4 billion per day. It had already submitted a plan to bolster its services and support systems to the Security Exchange Commission on January 23rd including a proposal for a ฿100 million reserve fund to protect investors.
Thailand’s popular cryptocurrency exchange Bitkub has been hit by another order from the country’s Security Exchange Commission. On Friday, it was ordered not to register or confirm new trading accounts on its exchange until the firm has addressed reported problems with system delays in processing customer orders believed to have been caused by heavy demand on the platform which has expanded so quickly.
One of Thailand’s brightest internet startups, Bitkub, the online cryptocurrency exchange which in January cornered 97% of the market, has been hit by another set back this week after the Security Exchange Commission ordered it to stop opening new accounts on its online platform due to constant complaints from customers of delays in processing transactions in a heavy trading environment.
This is the second time that the up and coming online platform has been hit by a broadside from the government regulatory agency which oversees the kingdom’s capital markets.
Plan submitted including ฿100 million reserve fund
The online exchange, headed by dynamic CEO, Jirayut Srupsrisopa, has been working with the commission since the end of January when it was ordered to upgrade its facilities.
It is understood that, on January 23rd, a plan was delivered by the company, Bitkub Capital Group Holdings, which included a proposal to deploy more staff for screening account applications for compliance purposes as well as a ฿100 million reserve fund to protect investors.
Latest order on Friday restricts Bitkub in opening new accounts although the company had already implemented this for some days
On Friday, shortly after the Security Exchange Commission made the latest order, Bitkub announced that it would be complying and would undertake the work ordered by the regulatory body immediately.
In its order, the government oversight agency said that problems persisted with Bitkub and its ability to cope with the high demand and load required by the public to trade in cryptocurrencies promptly and easily.
It is understood that even prior to the order, Bitkub had taken steps to restrict the ability of users to create new accounts since earlier this week as it works with the Security Exchange Commission to resolve issues.
Record levels of trade in the opening weeks of January
The company, which hit record levels of trade for its business in the first weeks of January, was forced to temporarily halt trading due to system problems some weeks ago.
Despite this, Bitkub continues to be extraordinarily popular with customers in the Thai market.
However, for now, it will be prohibited from taking on new clients or confirming existing applications until the Security Exchange Commission is satisfied it can handle the full extent of demand in the flourishing market.
Five issues identified by government watchdog
The agency identified five areas of concern which it requires management at Bitkub to address including the ability to handle trade volume, a system allowing customers to withdraw their assets or investments immediately in the event of the main system going down, providing a clear system to verify new account holders, providing a user complaint system and a full emergency plan detailing the company’s systems and policies.
Bitkub is a rapidly expanding firm
The firm had expanded its workforce to 230 people and moved to new larger offices in the centre of Bangkok last year. It is still recruiting personnel as part of its reorganisation.
Bitkup, spectacularly, grew by 1000% in 2020 and in the opening weeks of 2021, by another 1000% with daily trade volumes reaching up to ฿4 billion.
Facing new competitors
The latest setback and ongoing difficulties in the last few weeks could not be coming at a worse time for the exciting new startup.
As well as being shut out of registering new customers until its system is upgraded, it faces three new entrants to the market also licensed by the Stock Exchange of Thailand as competitors in addition to a handful of existing firms that it had overtaken to become the dominant market leader.
Upbit backed by the billionaires
One of these is Upbit, launched by a group of four IT professionals and backed with ฿80 million in capital as well as the financial muscle of several Thai billionaires, among the most wealthy people in the world, including Chatchaval Jiaravanon, the heir to the CP Group conglomerate and the owner of Fortune Magazine.
About the Author
James Morris is a pename for an international writer based in Bangkok who works on various international news media. He is a sub editor with the Thai Examiner news website since it began in 2015. Son Nguyen is an international writer and news commentator specialising in Thai news and current affairs. He commenced working with the Thai Examiner News Desk in May 2018.