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Thai Regulators Investigate Zipmex Over Suspected Misrepresentation of Earn Program

• Thai regulators are investigating Zipmex’s local branch over its earn program due to suspicions that the business misrepresented the interest payments it made.
• The regulator accused Zipmex of running an earning program without approval and cited section 26 of Thailand’s Emergency Decree on Digital Asset Businesses.
• Zipmex’s activities came under the radar of investigative authorities after it released a disclosure letter dated November 30.

The Securities and Exchange Commission of Thailand is looking into the local branch of Zipmex, a digital asset exchange, due to suspicions that the business misrepresented the interest payments it made in its earn program. The regulator has accused the company of running an earning program without approval, a violation of section 26 of Thailand’s Emergency Decree on Digital Asset Businesses. Penalties for such infractions can include fines and imprisonment.

According to a letter sent by Thai regulators and addressed to Zipmex’s Thailand unit boss Akalarp Yimwilai on Dec. 28, the company used Babel Finance to manage clients’ digital assets in the earning program. Zipmex’s activities came under the radar of investigative authorities after it released a disclosure letter dated November 30, which stated that the company had gone beyond what it had first stated about the program. While Zipmex initially claimed that it was just using funds set aside for marketing to pay for the earning program, the disclosure letter showed that the company had also deployed and managed customer funds, which would have required regulatory approval from the Thai government.

The Thai watchdog also raised concerns about ZLaunch and perhaps ZipLock as staking services, and that Zipmex’s license had not been granted in accordance with the country’s existing laws and regulations. The regulator has requested that Zipmex provide more details about its accounts, such as the terms of service, transaction history, user information, and other essential documents.

It is unclear at this point how the investigation will proceed, or what the outcome may be for Zipmex. However, it is clear that Thai regulators are taking a closer look at digital asset exchanges. This could mean the introduction of more stringent regulations to ensure the safe and secure operation of such businesses in the country.