The Securities and Exchange Commission (SEC) of Thailand has announced the revocation of Longroot’s licence to operate as a digital token offering (ICO) portal service provider, effective from Monday. This decision comes after Longroot failed to meet the regulatory criteria set by the SEC.
Non-compliance and Regulatory Breaches
According to the SEC’s official statement, Longroot was unable to maintain its financial qualifications, personnel structure, and work system as required. Furthermore, the company did not prepare and submit necessary reports related to its IT system within the specified period. These failures rendered Longroot incapable of complying with the SEC’s stringent criteria, leading to the revocation of its operating licence.
“The SEC is authorised to supervise ICO portals to comply with relevant regulations, and ICO portals must maintain the qualifications set by the SEC board at all times of doing business and providing services for the benefit of investors,” the SEC statement emphasized.
Current Status and Market Impact
The SEC noted that Longroot currently has no customers or outstanding transactions. The regulator’s decision appears to have minimal immediate impact on the company’s clientele or ongoing operations.
In a broader context, the digital asset market experienced a significant rebound yesterday, following a sharp selloff on Monday. This recovery was observed across various cryptocurrencies, including Bitcoin and Ethereum, as well as other risky assets like stocks, amid fears of a potential US economic recession.
Market Reactions
According to CoinGecko, the crypto market lost approximately US$270 million on Monday, with Bitcoin’s price falling by 11% and Ethereum’s dropping by 21%. However, the market showed signs of recovery yesterday, with Bitcoin surging 4% to $55,441, Ethereum rising 7% to $2,497, and Binance Coin (BNB) increasing by 9% to $480.
This selloff in the crypto markets mirrored declines in Asian stock markets. Japan’s Nikkei 225 index fell by up to 7%, continuing losses that started last week after the Bank of Japan announced its decision to raise interest rates to their highest level in 16 years.
Broader Economic Context
The Nasdaq also experienced significant losses last week, dipping 3.4% and entering correction territory. This marked the tech-heavy index’s worst three-week losing streak since September 2022, driven by declines in major stocks like Amazon and Nvidia. The downturn was attributed to disappointing earnings results, a weaker-than-expected US jobs report, rising unemployment rates, and a slowdown in the manufacturing sector.
The recent economic data has led analysts to predict that the Federal Reserve might cut interest rates in September by 0.5%, from the current range of 5.25-5.50%.
Future Outlook
The revocation of Longroot’s licence highlights the SEC’s commitment to maintaining rigorous standards for ICO portals, ensuring they operate within the regulatory framework for the protection of investors. As the digital asset market continues to evolve, regulatory bodies worldwide remain vigilant, ensuring that companies within this space adhere to established guidelines and maintain the necessary qualifications to operate.
This regulatory action and the market’s reaction underscore the intertwined nature of global financial markets and the growing influence of cryptocurrency in the broader economic landscape.
