KuCoin Thailand Hits Regulatory Wall as Shareholder Rift Triggers Capital Breach

KuCoin Thailand Hits Regulatory Wall as Governance Breakdown Triggers SEC Suspension

Thailand’s Securities and Exchange Commission (SEC) has suspended all digital-asset operations of ERX Company Limited, operator of KuCoin Thailand, after its capital fell below the regulatory minimum for five consecutive working days. While the headline reads like a liquidity problem, the real issue is corporate governance: a shareholder conflict that froze decision-making, delayed a capital increase, and exposed how tightly regulated crypto has become in Thailand’s post-boom era.

Key Stats

• Suspension period: Dec 29, 2025 – Jan 2, 2026 (capital below minimum for 5 working days)
• Regulator: Thailand SEC
• Company: ERX Company Limited (KuCoin Thailand)
• Corrective plan submitted: Jan 12, 2026
• Target deadline for resolution: Feb 12, 2026

What Actually Happened

According to KuCoin Thailand CEO Att Thongyai Asavanund, the suspension was not caused by a cash shortage or an inability to meet client obligations. Instead, it stemmed from a dispute between two major shareholder blocs: the CI Group (a Singapore-based fund) and an alliance group closely linked to KuCoin Global.

When disagreements escalated and several directors resigned, the company lost the ability to convene a shareholders’ meeting. Without that meeting, a planned capital increase—already backed by funding—could not be formally approved. From the regulator’s perspective, capital fell below the required threshold. From the company’s perspective, money was available but governance was broken.

This distinction matters. Thailand’s SEC applies capital maintenance rules originally designed for traditional securities firms, where settlement occurs on a T+2 basis and brokers must hold cash buffers to clear trades. Digital-asset trading, by contrast, operates on a cash-balance basis with instant settlement. Structurally, the risk profile is different—but the rules are the rules.

The Regulatory Signal

This case sends a clear message: Thailand’s crypto market is no longer operating in a regulatory gray zone. Even temporary breaches—regardless of intent or underlying liquidity—will trigger enforcement if governance and compliance fail.

For regulators, the logic is straightforward. If shareholders cannot agree, boards cannot function, and capital decisions cannot be executed, systemic risk emerges. In a market where investor protection is now the top priority, excuses about internal disputes do not carry weight.

The Fix: One Owner, One Voice

KuCoin Thailand has submitted a corrective plan centered on resolving the shareholder conflict at its root. The proposal would consolidate control under a single shareholder group—expected to be the KuCoin alliance—by buying out the opposing bloc. The goal is simple: restore decision-making authority, complete the capital increase, and satisfy the SEC’s capital maintenance rules by the February 12 deadline.

If executed, this would eliminate governance paralysis and allow the company to resume regulated operations.

Strategic Pivot: From Exchange to Broker

Beyond fixing the immediate regulatory issue, KuCoin Thailand is planning a structural pivot. Instead of operating purely as a digital-asset exchange, the company intends to apply for a digital-asset broker licence.

The distinction is strategic. An exchange is constrained by its own order books and listed assets. A broker model aggregates liquidity and products from multiple global partners, giving users broader access and faster execution. In CEO Att’s analogy, an exchange is like a stall at Bangkok’s Chatuchak Market; a broker is more like Lazada or Shopee—one interface, many suppliers.

In a crowded Thai crypto market with slowing equity returns, this model could offer differentiation and resilience.

Macro Takeaway

This episode is not bearish for crypto—it’s clarifying. Thailand is forcing digital-asset firms to meet the same governance and capital discipline expected in traditional finance. The era where growth could outrun structure is ending.

For operators, the lesson is brutal but clear: liquidity alone is not enough. Governance, shareholder alignment, and regulatory fit are now existential. For the market, this is what maturation looks like—painful in the short term, but necessary for long-term credibility.

What Comes Next

If KuCoin Thailand resolves its shareholder dispute and executes its broker pivot, the suspension may ultimately be remembered as a reset rather than a failure. If not, it will serve as a case study in how internal conflict—not market conditions—can be fatal in a regulated crypto environment.

In Thailand’s next crypto cycle, compliance won’t be optional alpha. It will be survival.