Following the SEC's monitoring and examination of Bitazza operations, it was found that the company has significant deficiencies in critical systems related to the operation of digital asset business. In particular, the account opening and KYC system is inadequate, resulting in the company’s failure to know its clients and verify the true identity of the clients or beneficial owners. These shortcomings could potentially lead to money laundering and the financing of terrorism. Additionally, the company has deficiencies in the system for safeguarding client assets denominated in Thai baht, non-broker operations, the management of conflicts of interest and the access to the company’s information. These are critical systems, and failure to address these issues could lead to potential harm to clients.

On 5 September 2024, the SEC Board Meeting No. 11/2024, by virtue of Paragraph 1 of Section 35 of the Emergency Decree, passed a resolution requiring Bitazza to rectify its operations fully within 24 September 2024. The rectifications cover the followings:   

(1) Revising the account opening and KYC system, assessing the suitability of clients’ investments in digital assets, and reviewing and updating client information. This also includes disclosure of information to clients ensuring that they are fully and accurately informed about the application process for service usage; 

(2) Rectifying the asset custody system by ensuring that client assets denominated in Thai baht are kept separate from the company’s assets and establishing an efficient system for the deposit and withdrawal of monetary assets;

  (3) Discontinuing non-broker operations and ensuring their compliance with specified regulations. It was found that the company engaged in other businesses that could lead to conflicts of interest, and these businesses pose risks to client assets. Such operations require approval from the SEC Board, which the company has not obtained; and

  (4) Improving measures to prevent conflicts of interest and properly controlling  access to the company’s information.

Mr. Anek Yooyuen, SEC Deputy Secretary-General and Spokesperson, said: “Pursuant to the specified legal proceedings, the digital asset business operator’s failure to comply with Section 35 of the Emergency Decree may lead to the consideration of license revocation.”     

The SEC emphasizes the importance of monitoring the operations of business operators to ensure that they comply with the governing regulations. In this regard, Bitazza clients may contact the company’s client service center. Further inquiries may also be sent to the SEC Complaint Center via Hotline 1207 ext. 8, or email: info@sec.or.th, or SEC Office Facebook Page or SEC Live Chat at www.sec.or.th.   

______________________

Remark:  

The relevant law and regulations are as follows:  

  - Notification of the Securities and Exchange Commission No. Kor Thor. 19/2561 Re: Rules, Conditions and Procedures for Undertaking Digital Asset Businesses, dated 3 July 2018.   

  - 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.