Thailand’s Securities and Exchange Commission (SEC) has officially filed a criminal complaint against the country’s largest crypto exchange, Bitkub Online, and two of its former directors. The legal action follows allegations of covering up the financial fallout from a major security breach that resulted in losses of around 1.7 billion baht, or roughly $50 million.
The two former directors named in the case are Sakolkorn Sakavee and Thaweesap Rawan, who were responsible for the company’s financial reporting during the period under investigation. The case stems from a hacking incident in May 2021, when attackers breached Bitkub’s systems and siphoned off 16 types of digital assets.
Clean Records Despite Heavy Losses
The SEC discovered irregularities in the daily net liquid capital reports submitted by Bitkub between May 10 and October 30, 2021. The filings showed no significant reduction in assets following the heist. Bitkub is accused of violating several Thai digital asset regulatory requirements by failing to reflect the incident’s impact during that critical timeframe.
The SEC noted that Bitkub managed to replace the stolen assets before October 31, 2021. However, the regulator took issue with the company’s failure to report its true financial condition immediately after the exploit took place.
The Bank Run Defense
Responding to the allegations, Bitkub addressed the situation in a post on X, strongly denying any fraudulent intent. The company argued that the decision to delay disclosing the wallet compromise was made solely to avoid customer panic that could trigger mass withdrawals or a bank run.
The exchange remained silent while its internal team worked to address the lost assets. According to Bitkub’s claims, a company co-founder stepped in to purchase equivalent digital assets to cover the stolen funds. This rescue effort reportedly ensured that neither customers nor the firm suffered financial losses from the hack.
Tough Test on the Road to Going Public
According to CoinGecko data, Bitkub currently ranks as Thailand’s top crypto exchange by trust score, with a 24-hour trading volume of around $712 million. The legal proceedings will advance to a deeper investigation phase, which could lead to formal prosecutions and a court trial.
The criminal inquiry comes at a particularly sensitive time, as Bitkub’s parent company is evaluating plans for an initial public offering (IPO), including a potential listing in Hong Kong. Past decisions to conceal security breaches to avoid short-term panic are now catching up with the company before it can reassure public investors.
Source: Cointelegraph.
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
