The cryptocurrency regulatory policy has not yet been implemented, and the Bank of Thailand has begun freezing exchange accounts

According to reports, a major Thai bank has terminated the bank accounts of local cryptocurrency exchanges after the central bank announced a ban on financial institutions from participating in five types of cryptocurrency activities. At the same time, the Thai government is actively developing a legal framework for cryptocurrencies.

Banks halt cryptocurrency transactions

Bangkok Bank, one of Thailand’s largest banks, has become the first financial institution in the country to halt cryptocurrency-related transactions.

The bank no longer provides trading services for TDAX, a major domestic exchange, because TDAX's business model is inconsistent with the business purpose given when it was registered with the Ministry of Commerce.

TDAX is a local cryptocurrency exchange with a registered capital of 5.5 million baht (about $175,000). The exchange's founder and CEO Poramin Insom said they plan to increase the registered capital in order to apply for an ICO license from the Thai Securities and Exchange Commission.

As for the exchange’s account at Pangu Bank, Insom said:

The bank called and asked if we had a license to operate. I told them that this type of business is not currently regulated by law, so the bank said it would close our account because we did not have a license.

According to people familiar with the matter, TDAX has a savings account at Pangu Bank. However, bank staff said that some documents have been lost, so the bank decided to block all transactions related to this account.

Since all transactions on TDAX’s bank account were frozen, the source said the exchange “also requested the closure of its bank account,” claiming that “banks do not have the power to force customers to open or close accounts.”

Last week, the Bank of Thailand issued an announcement requiring financial institutions not to participate in five types of cryptocurrency activities, but opening accounts for cryptocurrency exchanges was not one of them. At the same time, the government is actively formulating cryptocurrency regulatory policies, which are expected to be completed by the end of the month.

Transactions not affected  

Insom said Pangu Bank’s termination of TDAX’s account did not affect trading in bitcoin and 10 other cryptocurrencies.

Due to the high demand for digital currencies from investors, daily transaction volume remains normal. Investors can also conduct transactions through three other banks.

Despite the decision by Pangu Bank, other banks continue to provide services to the exchange. Kbank stated in a statement:

After discussions with the central bank, we believe that processing transactions for such accounts should not be considered as supporting customers in virtual currency transactions. Therefore, Kbank is still processing financial transactions for TDAX.