The Thailand Securities and Exchange Commission (SEC) has issued a directive to temporarily suspend the operations of Zipmex Company Limited, a digital asset trading center and brokerage service provider.
This decision comes in response to ongoing financial and operational challenges faced by Zipmex, despite prior warnings from the SEC.
The SEC had initially provided Zipmex with a 15-day window to address these issues, which began on January 12, 2024.
However, as the specified timeframe has passed without satisfactory corrective measures being taken, the SEC Committee convened on February 1, 2024, to take action.
The committee expressed its concerns over Zipmex’s failure to rectify issues related to net liquid capital maintenance, business structure, and potential violations involving customer property.
Effective from February 2, 2024, Zipmex is required to comply with specific actions outlined by the SEC.
Anek Yuyuen, the Deputy Secretary General and spokesperson for the SEC, explained that according to the legal process, if a digital asset business operator fails to comply with the SEC’s orders within the specified period, the SEC can propose to the Minister of Finance that the order be revoked, as per the Digital Assets Decree.
Zipmex is mandated to rectify its financial situation to align with regulatory guidelines, restructure its management and personnel to ensure efficiency and compliance with legal requirements, and establish a system to safeguard customers’ assets, Reuters reported.
These corrections must be submitted within 15 days from the suspension date, after which the SEC will evaluate whether to grant permission for the resumption of normal business operations.
During the suspension period, Zipmex is obligated to prioritize its customers’ interests by allowing asset withdrawals at any time. Additionally, the company must proactively communicate with customers regarding fund and digital asset returns and facilitate money transfers in accordance with customer preferences.
Zipmex’s troubles stem partly from its exposure to Babel Finance, an Asian crypto-lending platform currently undergoing liquidation.
In 2022, Zipmex initiated discussions with potential investors and engaged with the SEC and other government agencies to present its recovery plans and seek approval.
Operating across the Asia Pacific region, Zipmex maintains a significant presence in Thailand, Singapore, Australia, and Indonesia.
The SEC’s decision underscores the importance of maintaining financial integrity and compliance within the digital asset industry, reflecting the regulatory body’s commitment to safeguarding investors and maintaining market stability.