Thailand’s Securities and Exchange Commission is looking into Zipmex’s local branch over its earn program due to suspicions that appear to include how the business represented the interest payments it made.

According to the letter sent by Thai regulators and addressed to Zipmex’s Thailand unit boss Akalarp Yimwilai on Dec.28, there are questions being asked. The Thai watchdog accuses Zipmex of running an earning program (ZipUp/ ZipUp+) without approval. 

In the letter, the regulator cited section 26 of Thailand’s Emergency Decree on Digital Asset Businesses, which specifies penalties ranging from fines to imprisonment, and stated that anyone managing funds related to digital assets must get a license from the nation’s Ministry of Finance. 

The regulator said that Zipmex used Babel Finance to administer clients’ digital assets in the earning program.

The bone of contention 

Zipmex activities came under the radar of investigative authorities after it released a disclosure letter dated November 30; Zipmex had informed rescue investor V Ventures that Zipmex Thailand had gone beyond what it had first stated about the program. 

While the company first claimed that it was just using funds set aside for marketing to pay for the earning program “bonus,” the disclosure letter shows that it may have also deployed and managed consumer cash, which would have required regulatory approval from the Thai government.

According to the company’s disclosure letter, the Thailand SEC also raised concerns about ZLaunch and perhaps ZipLock as staking services and that Zipmex’s licenses do not provide coverage for staking.

In light of regulators of inquiries on the activities of the crypto exchange, Zipmex has declined all comments request. 

On the other hand, the Thai SEC has given Zipmex until Jan.12 to officially respond to the letter with the strict promise to proceed with further actions in case Zipmex defaults.