On 12 January 2024, pursuant to Section 35, Paragraph 1, of the Emergency Decree on Digital Asset Businesses B.E. 2561 (2018) (Digital Asset Business Law), the SEC sent a letter to Zipmex ordering the company to rectify its financial condition to comply with the net fund maintenance rules as well as solve the issue of its improper and inadequate management and personnel structures and the case where the company may be liable to an offense related to client assets, which may cause damage to the clients, pursuant to the resolution of the SEC Board. Zipmex submitted clarifications on the matters to the SEC on 27 January 2024.
On 1 February 2024, the SEC Board Meeting No. 2/2567 considered the Zipmex case and concluded that the company remained unable to rectify its financial condition and the deficient operations, as ordered. The SEC Board, therefore, by virtue of Section 35, Paragraph 2, of the Digital Asset Business Law, passed a resolution ordering a suspension of Zipmex business operations as digital asset exchange and digital asset broker, starting from 2 February 2024. In addition, during the suspension, Zipmex is required to:
(1) Rectify its financial condition to ensure compliance with the fund maintenance rules under Clause 15 of the SEC Notification No. Kor Thor. 19/2561;
(2) Rectify the management and personnel structures to ensure appropriateness and adequacy for efficient business operations. Such personnel must have appropriate knowledge, competency and experience in accordance with Clause 8 and Clause 10 of the SEC Notification No. Kor Thor. 19/2561; and
(3) Rectify the work systems to prevent the use or the seeking of benefits from the clients’ deposited assets regardless of whatever means.
Zipmex is required to submit the results of its rectifications in all matters above to the SEC within 15 days, as from 2 February 2024. To resume its normal business operations, Zipmex must be granted prior permission from the SEC Board. However, currently Zipmex’s business operations of all types are being suspended, as ordered by the SEC on 24 November 2023, as a result of its failure to maintain net fund as required by law.
Furthermore, during this suspension order, Zipmex is required to arrange for the clients’ withdrawal of assets at all times, contact the clients to return their money and digital assets, transfer money back to the clients, and transfer digital assets according to the clients’ intention.
The SEC emphasizes the importance of monitoring the operations of business operators to ensure that they comply with all governing rules. In this case, Zipmex clients may contact the company’s customer service center, or make further inquiries with SEC Complaint Center via Hotline 1207, extension 8, or email: info@sec.or.th, or visit the official SEC Facebook Page or SEC Live Chat at the SEC website: www.sec.or.th.
Mr. Anek Yooyuen, SEC Deputy Secretary-General and Spokesperson, said: “According to the specified legal procedures, if any digital asset business operator fails to comply with the SEC Board’ order pursuant to Section 35, Paragraph 2, of the Digital Asset Business Law, within a specified period of time, the SEC Board may propose to the Miniter of Finance for a consideration of license revocation pursuant to Section 35, Paragraph 3, of the Digital Asset Business Law.”
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Related news releases and notifications:
- SEC News No. 13/2024: SEC instructs Zipmex to rectify operations in compliance with the specified rules within 15 days, issued on 13 January 2024: https://www.sec.or.th/EN/Pages/News_Detail.aspx?SECID=10450&NewsNo=13&NewsYear=2024&Lang=EN
- SEC News No. 227/2023: SEC orders Zipmex to rectify its net capital position and act in the best interest of clients, issued on 25 November 2023: https://www.sec.or.th/EN/Pages/News_Detail.aspx?SECID=10490&NewsNo=227&NewsYear=2023&Lang=EN
- SEC Notification No. Kor Thor. 19/2561 Re: Rules, Conditions and Procedures for Undertaking Digital Asset Businesses, dated 3 July 2018:
https://publish.sec.or.th/nrs/8138s.pdf
- Emergency Decree on Digital Asset Businesses B.E. 2561 (2018):
Section 35: If it appears that the financial condition or operations of a digital asset business operator is in such condition which may cause damage to the public, or a digital asset business operator violates or fails to comply with the prescribed rules, procedures and conditions, the SEC may order the digital asset business operator to rectify it within the specified period of time.
If the digital asset business operator fails to comply with the first paragraph, the SEC may order the digital asset business operator to temporarily suspend its operations either in whole or in part within the specified period of time for the rectification. In this regard, the SEC may also specify any condition to be complied with by the digital asset business operator for the purpose of rectifying the financial conditions or operations of such digital asset business operator.
If the digital asset business operator fails to comply with the second paragraph, or in the case of repeated non-compliance, the Minister, upon the recommendation of the SEC, may consider revoking its licence. In this regard, the Minister, upon the recommendation of the SEC, may order the digital asset business operator whose licence is revoked to take any action to protect the interest of its clients.