Thai SEC Prohibits Crypto Staking And Lending Following Zipmex Bankruptcy

Thai Securities and Exchange Commission (SEC) has issued a statement prohibiting crypto lending and staking services from being offered to investors in the country.

This is rather a reforming measure to salvage all that is left from the downtrend of the crypto market in the second quarter of the year.

Specifically, this move comes a few months after crypto exchange Zipmex joined the likes of Celsius Network and Babel Finance who halted trading and withdrawal on their platform due to the bearish market.

Before now, traders get involved in crypto lending which allows them to receive a percentage of interest after lending their digital assets to interested borrowers. While crypto staking permits traders to get rewarded for locking in or storing their digital assets for a particular period of time so as to support a blockchain platform. 

With these staking and lending options provided by centralized cryptocurrency exchanges, the traders get to earn on their idle-looking digital assets.

Instead, the Thailand regulator says this perk will no longer be available. Thailand SEC takes this move as a measure to protect investors in its economy, from liquidity risk which is imminent in the face of such depository offerings. 

Zipmex Bankruptcy Challenges Thai Crypto Offerings

Discussions from a meeting of Thai regulators held at the beginning of this month identified the issue of liquidity of several foreign crypto exchanges in the country.

As a matter of concern, these regulators decided that taking out these interest-based offerings will rescue the crypto industry. Additionally, it is believed that the misconceptions about the regulation of digital assets-related offerings will be addressed with this ban.

Cryptocurrency exchange Zipmex which the regulators have taken note of halted withdrawals on its platform sometime in July but resumed almost immediately with a partial withdrawal allowance.

Soon after, it began to seek protection with the Singapore High Court by requesting a six-month moratorium against investors’ lawsuits. Later, Zipmex received a little above three months moratorium from the court.

As the moratorium is ongoing, the Thai SEC requested information concerning Zipmex business operations.

No response was issued but after much persuasion from the regulator, the exchange submitted a piece of incomplete information. Just a few days ago, the Thai SEC indicted Zipmex Thailand and its Chief Executive Officer Akalarp Yimwilai for non-compliance to order.