SCB-Bitkub deal fizzles as young investors lose big on crypto
As the crypto market cools and young, naïve investors lose big, the deal for Siam Commercial Bank Group (SCB) to acquire a majority stake in Thai digital asset exchange Bitkub Online has fallen apart. The deal, announced in November of last year, pushed Bitkub Online’s value over US$1 billion and drove the company’s cryptocurrency to triple in value overnight.
SCB’s parent company SCBX struck a deal to take over 51% of shares of Bitkub from its parent company Bitkub Capital Group Holdings, a deal valued at the time at 17.85 billion baht. But the bank corporation announced Thursday that they had reached a mutual agreement to cancel the major investment plan.
The plan was a major boost to cryptocurrencies in Thailand, bringing a national infrastructure that incorporates a digital asset exchange. But Bitkub has a variety of issues that need resolving, which killed the deal, according to a statement released by SCBX and signed by their CEO.
“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 of Thailand, which are uncertain in terms of timeframe in resolving those issues. As a result, the buyer and the seller have agreed to terminate the transaction. SCBX and SCBS remain committed to their strategic plans to expand into businesses relating to blockchain technology and digital assets, which will play an important role in Thailand’s economy and financial industry.”
Meanwhile, a government think tank called the National Economic and Social Development Council warned that digital assets and cryptocurrencies have brought big losses to young Thai investors that considered crypto a get-rich-quick miracle without a proper understanding of the market or investing in general.
About half of all registered crypto investors in the country are under 30 and, while a few people made millions in cryptocurrency, others thought they could become millionaires as well and instead lost massive amounts. A study by Mahidol University’s College of Management found that 45% of investors lacked an understanding of the market, with 25% choosing crypto investments on gut feelings instead of research and information.
The study also found that about 65% of traders in Thailand use international crypto platforms instead of domestic platforms like Bitkub to avoid paying Thai taxes.
