Thailand’s Securities and Exchange Commission (SEC) recently decided to ban crypto companies from offering betting and lending services. The main reason behind this was to protect traders from the potential risks associated with crypto lenders.
Many prominent crypto lenders have also suffered liquidity problems lately due to the market downturn. The decision to ban “repository services” includes refunds to depositors and was created to primarily protect traders from the risks that have been associated with crypto lenders.
Crypto lenders such as Celsius Network and Babel Finance, which have been offering lending services, have frozen their withdrawals in recent months due to the industry-wide downturn.
Market movers like Bitcoin and Ethereum have lost more than 50% of their market value since the start of 2022. Zipmex is also one of the beleaguered exchanges that have halted withdrawals. The exchange has entities in Singapore, Thailand, Australia and Indonesia.
The move comes after the bankruptcy of crypto exchanges
Liquidity issues have plagued cryptocurrency exchanges this year, especially as the industry has been reeling under a difficult situation.
Stock markets reported serious liquidity concerns in 2022. Some lenders had planned to provide higher interest rates to depositors, and they, in turn, also faced defaults as the market collapsed.
The Thai SEC had proposed it
Prohibiting crypto businesses from taking deposits of digital assets and further using those digital assets to borrow and invest to pay depositors. Prohibition of advertising or soliciting the public or conducting any activity that would support deposit taking or lending services. Banning digital business operators from accepting digital assets and paying depositors refunds.
Thailand’s SEC also conducted an investigation into the losses faced by the public. It has received feedback on the impact Zipmex is causing through an online forum.
Zipmex withdrawals have now resumed for customers in Thailand, but that hasn’t taken the exchange off the SEC’s radar.
The current status of Zipmex
Thailand’s SEC became involved due to the liquidity problems faced by the Zipmex exchange, starting in July 2022.
At that point, Zipmex had a strong presence in Southeast Asian countries. It had just stopped deposits and withdrawals on the platform.
At this time, Zipmex has assured that it is working closely with the SEC and is fully compliant with the necessary standards and security measures.
The SEC has also decided to implement strict advertising rules for crypto companies operating in the country from October 1.
Companies should reduce advertising by promoting crypto directly on “official channels” as well as on their own websites, and should provide details of ads and spending.
This includes the role of social media influencers and bloggers, as well as their terms with the SEC.