The Securities and Exchange Commission (SEC) ordered Bitkub Online to review KUB coin's presence on the exchange after finding it does not meet the regulatory listing requirements and criteria.
Bitkub must review the selection and listing process and present evidence that KUB coins comply with the exchange's listing criteria within 30 days, from July 1.
According to the SEC, Bitkub claimed the KUB project's technology met Bitkub's standard at an "unprecedentedly" high level, but there was no evidence or documentation to support such a claim. The exchange said the coins are eligible for public fundraising and pre-initial coin offering sale, which are not the coins' functions.
Thus, the SEC deemed the overall selection score of KUB coin was invalid, and decided the coin was ineligible for trade on any cryptocurrency exchanges.
On Thursday, the SEC imposed civil sanctions on Bitkub Online, Bitkub's market maker Anurak Chueachai, and Bitkub Capital Group Holdings' chairman Sakolkorn Sakavee for fabricating information regarding the trading volume of digital assets on the exchange.
According to the SEC, Mr Sakolkorn loaned money to Mr Anurak, who then proceeded to use the funds to send matching orders for four cryptocurrencies -- Bitcoin, Bitcoin Cash, Ethereum and Ripple -- in February 2019.
Around 84-99% of Mr Anurak's total trading was composed of the matching orders. The matching orders also made up 57-99% of the total trading volume of the exchange at the time.
The SEC confirmed that both Bitkub and Mr Sakolkorn were aware of the deal, but neither had objected to Mr Anurak's trading.
Bitkub, Mr Anurak and Mr Sakolkorn have each been fined 8 million baht, comprising the maximum civil fine and reimbursement of the SEC's expenses during the investigation, totalling 24 million.
The SEC also banned Mr Sakolkorn from holding executive positions in the company for 12 months.
A similar situation occurred on the Satang Pro cryptocurrency platform, when LLC Fair Expo Company colluded in submitting orders and selling digital assets to mislead others.
Poramin Insom, the managing director of Satang Corporation, and Mikalai Zahorski, managing director of LLC Fair Expo Company, were fined 6 million baht each.
After becoming aware of the SEC's order, Mr Sakolkorn wrote about the matter on his personal Facebook account.
Mr Sakolkorn stated Bitkub had not created fake trading volumes ever since it was warned for the first time three years ago, and asked the SEC to review other exchanges for parity.
"The case is related to an incident that happened three years ago when the SEC inspected Bitkub Online after it acquired a digital asset exchange licence," he said.
Mr Sakolkorn said the crypto industry was very new in the Thai capital market at that time and every local digital exchange operating, including BX Thailand, Bitkub Online and Satang Corporation, all fabricated the quantity of digital assets traded on the exchanges because they lacked a thorough understanding of the rules.
Bitkub and Satang both stopped fabricating data after receiving a warning three years ago, he said.
Since that time, Bitkub has installed a system to prevent mutual matching of orders from the same account and established a market surveillance team to check for irregular trading activities, said Mr Sakolkorn.
He agrees with the importance of the SEC stepping in and raising awareness regarding this matter to enhance the quality of corporate governance. However, other digital exchanges must be subject to the same standards and rigorous inspections, said Mr Sakolkorn.
He said more than 400,000 investors are holding KUB coins, more than the holders of any one stock on local bourses.
Mr Sakolkorn said sentiment in the cryptocurrency market is poor because of the impact of external factors such as interest rate hikes, a liquidity crunch due to quantitative tightening, and the collapse of TerraUSD and Luna.
The price of KUB was 94 baht as of 1pm on July 1, down 9% from the previous day.
The coin peaked at 580 baht on Dec 28, 2021.
