Bitkub clarifies Market Maker Fine Penalty by SEC

MONDAY, JULY 04, 2022

On June 30, an announcement was made on the Bitkub Facebook fan page or “Bitkub Exchange” which is managed by Bitkub Online Co., Ltd. regarding a fine penalty from the Securities and Exchange Commission of Thailand (SEC) due to a fabrication of digital asset trading volume on the exchange.

This incident occurred 3 years ago which was during the company’s early stage and the company also still lacked a thorough understanding of the newly launched regulation which is stated as follows.

“According to the Securities and Exchange Commission of Thailand (SEC)’s announcement regarding a fine penalty against Bitkub Online Co., Ltd. (“Company”) due to the market maker within the company’s exchange having conducted self-order pairing within their own trading account in 2019 which has led the public to misunderstand the market trading volume. 

The company would like to inform that the purpose of having a market maker at the time was to maintain liquidity within the company’s digital asset exchange, which has just recently opened, to be in line with the global market price. The intention was solely for the benefit of clients of the company’s digital asset exchange. According to our market maker’s investigation, the market maker only sent the trading prices in accordance with the direction of the global market price at that time.

However, after the company was informed by the SEC about the aforementioned activity, the company has investigated, suspended, and terminated the trading order of the market maker since 2019. Since then, the company has successfully developed a pairing system to forbid trade pairing from the same account in order to prevent such an incident from happening in the future.

Moreover, the company has established a Market Surveillance team to investigate any suspicious behaviors such as a self-order pairing with multiple accounts from malicious persons to assure that the exchange operates in accordance with the market mechanism under the preventive measures and the inspection of irregular trading orders. The company also regularly submits reports to the SEC. The company kindly asks our clients, investors, and stakeholders to trust and be confident in the preventive measures and inspections that we have adopted. We have taken every precaution in our business operations to prevent such occurrences in the future.

The company affirms that we have no intention to commit any illegal activities as well as we do not benefit from market maker orders. Throughout these years, the company has operated under good governance and regulation. We prioritize and uphold the benefits of our clients and investors.  In addition, we exercise maximum efforts to supervise and verify that persons involved are carrying out their duties in a prudent and lawful manner. Bitkub will continue to operate rightfully and adhere to the company’s principles in the future."

Afterward, Mr. Sakolkorn Sakavee, Chairman of Bitkub Online Co., Ltd, published a statement on his personal Facebook account stating as follows:

“I would like to kindly clarify the issue regarding the fine penalty and a 12-month temporary prohibition from holding a management position at Bitkub Online Co., Ltd.

The fine penalty was based on an action in 2019 which occured 3 years ago. The SEC visited and inspected Bitkub Online after having been granted with an operating license. During that time, there were only three Thai exchanges present, composed of BX, Bitkub, and Satang Pro.

During that period, the cryptocurrency industry was new in which all three of these companies had just recently been granted operating licenses. I believe that the majority of cryptocurrency exchanges around the world at the time commonly adopted a system of fabrication trading volume for digital assets. This has led to mistakes and a lack of thorough understanding of the rules by both Bitkub and Satang Pro (not to mention BX because it is already closed).

When we were warned and asked to stop by the SEC, we accepted and have stopped this action ever since. A system has been installed swiftly to prevent price matching of orders sent from the same account, and a Market Surveillance team had been established promptly to monitor any malicious activities such as self-order parining from multiple accounts.

One thing that I strongly believe is that the SEC’s decision to impose a fine penalty and bring this matter after 3 years of the incident occurred is to enhance stricter governance.

I hope that this good standard does not specifically target some exchange platforms like Bitkub or Satang Pro but rather inspects every operating licensed exchanges. For transparency, I believe that other companies would welcome the SEC’s inspection as well.

From then to now, 3 years have passed, I would like to reiterate that Bitkub has never fabricated trading volume in the market ever since. The company's income and taxes from the previous year should serve as strong evidence to support this statement.

I am still fighting and generally looking over Bitkub Group as before. There are still many scopes of improvement for Bitkub. I hope everyone can understand and continue to believe in Bitkub."