Thai SEC orders Zipmex Exchange to cease operations

In a recent development, the Securities and Exchange Commission of Thailand (SEC) issued a direct order to Zipmex, a well-known digital asset trading and brokerage platform, demanding a temporary pause in its operations. This move is the result of regulatory concerns, specifically regarding Zipmex’s management structure and its financial condition, which the SEC believes needs significant improvement.

Zipmex, now under the critical eye of the SEC, was given a 15-day countdown to align its practices with established regulatory standards.

According to a statement issued by the SEC on February 2nd, this decision was taken after the finding, in a committee meeting held on February 1st, that the platform had not yet met the necessary guidelines previously communicated on January 12th. The requirements included adjustments in the maintenance of liquid capital and changes in the structure and administrative personnel, aimed at operational efficiency and investor protection.

The obligation imposed on Zipmex to develop an effective system that guarantees the security of investors’ assets against illicit exploitation adds another layer of challenge to the platform. The SEC stipulates that, after the 15-day period, Zipmex must submit a report detailing the implementation of these measures. The approval of this report by the SEC is crucial for Zipmex to resume operations.

The issues facing Zipmex are not new, as the platform has already been under regulatory scrutiny for more than a year, due to an outstanding debt of 97 million dollars with its customers. In an attempt to resolve this issue, in November 2023, Zipmex proposed a repayment plan to its creditors, offering 3.35 cents on the dollar. Also in November, following another SEC order related to net capital, the platform suspended trading and deposit services.

Additionally, in January, the platform advised its customers to withdraw their assets, signaling the possibility of closing operations in the following months. The recent SEC directive reinforces this possibility, although the exchange has not yet issued an official response to the latest order. Notably, despite the suspension of operations, the SEC specified that Zipmex must remain accessible for withdrawals, which are currently processed manually.

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