The Bangkok South Civil Court has ordered that the class action lawsuit against Zipmex be denied.
The Bangkok South Civil Court has denied Zipmex's class action lawsuit, citing differing details of the victims, and instructed that a regular lawsuit be filed instead.
March 13, 2569 Southern Bangkok Civil Court I have read the order regarding the class action lawsuit filed by victims of... 'Zipmex Solidarity Group' Comprising approximately 800 members, who suffered combined damages exceeding 1,800 billion baht, the group listened to the reading of the court order. This followed a lawsuit filed by representatives of the group as plaintiffs against Zipmex (Thailand) Co., Ltd., Mr. Ekalap Yimwilai, former director and co-founder, and 23 other related parties, both domestic and international, as defendants in a class action consumer lawsuit seeking punitive damages totaling at least 5 billion baht. This marks the first class action lawsuit concerning digital assets in Thailand.
This case stems from Zipmex, which previously held a license to operate a digital asset business as a digital asset exchange and broker for cryptocurrencies and digital tokens under the Digital Asset Business Act B.E. 2561 (2018). This license caused damage to investors. Subsequently, the Securities and Exchange Commission (SEC) discovered several violations and filed charges with the police for criminal prosecution. Furthermore, the Minister of Finance, acting on the recommendation of the SEC, revoked Zipmex's digital asset business license on May 28, 2024.
Recently, the Bangkok South Civil Court, which conducted a hearing on the class action lawsuit at the court of first instance, issued an order stating that the court of first instance did not allow the class action and ordered the case to proceed as a regular civil lawsuit. However, this order is not yet final, and the parties have the right to appeal the court of first instance's order to the Court of Appeal. The court of first instance's order, in summary, explained that while it believed a class action lawsuit would help protect victims and ensure effective and fair access to justice without having to file separate lawsuits, the court found that the lawsuit involved both Zipmex (Thailand) Co., Ltd. and related parties, including former directors of the company, who assumed and left their positions at different times. Furthermore, since each victim entered into account opening and product usage agreements at different times, there were issues regarding the nature of the group as a group of individuals with differing factual circumstances, making a class action lawsuit inappropriate.
Following the reading of the order by the lower court, the court gave the victims and litigants an opportunity to ask questions and explained that the entire matter was complex and could be reviewed and considered by the appellate court according to legal procedure. The litigants and their lawyers were also asked to await a copy of the full order to study the details and consider possible courses of action if an appeal were to be filed.
Mr. Kitcha Jongkhwanyuen, as a representative of the 'Zipmex United Fight Group' and the plaintiff who initiated the case. Kitcha stated that, as a plaintiff in a class action lawsuit, he respects the lower court's interpretation of the law according to its discretion. Kitcha believes that what happened today is a "wake-up call" for society to consider that the interpretation of class action lawsuits is detailed and complex, and may involve considerations, especially regarding the protection of small investors, such as in cases involving national platforms with a large number of victims.
However, initiating a class-action lawsuit is impossible due to the terms of office of some executives, as the plaintiffs have only requested to pursue legal action and have not yet had the opportunity to question witnesses regarding those former executives. This means that the cost of accessing justice for individual investors would be enormously high. Those who can file a lawsuit may be able to file a single lawsuit for themselves, with sufficient resources to hire a private attorney without relying on the complex procedures of a class-action lawsuit. Furthermore, those executives might face an added burden as the plaintiffs have to file separate lawsuits against them individually.
And if we look at it from the perspective of systemic impact, from the point of view of those following fintech, the platform is a single system. When the system pauses withdrawals, the impact is the same for everyone using the platform, regardless of when they joined. Furthermore, the executives who came in at each stage are responsible for the platform's business operations, which may be continuously conducted in a manner that is potentially illegal, for the entire period in which they were in charge.
Mr. Kitchak reiterated that confidence in the system is crucial to the future of both the digital asset industry and other investment sectors. This lawsuit is not merely a fight for the money of the Zipmex victims, but also to establish a precedent: if the digital asset business faces problems again in the future, will investors have a tangible legal shield to protect them? If today, the shield of 'class action lawsuits' is ineffective or difficult to use due to complexities, confidence in Thailand's financial innovation sector could be impacted.
Mr. Kitchak concluded by saying that he hopes the Zipmex lawsuit, particularly the ongoing appeals process, will be a class-action lawsuit that demonstrates how the Thai justice system can adapt its laws to keep pace with the digital age and ensure fairness for all parties. He will discuss with his legal team to prepare for the appeal.
side Mr. Veerapat Priyawong, founder of VLA Law Firm, authorized representative of the plaintiffs, 'Zipmex Joint Fight Group'. He revealed that the court explained the reasons, emphasizing the benefits and importance of class action lawsuits. He stated that after listening to the order, he understood that the court did not focus on the core charges of the case, particularly regarding the lawsuit against Zipmex (Thailand) Co., Ltd. and Mr. Ekalap Yimwilai. Instead, the court focused on issues concerning some of the former directors who are defendants. He respects the court's perspective and will await the full order for further consideration. Even if the court grants permission for the class action today, the defendants have the right to appeal to the Court of Appeal to overturn the denial. Therefore, he requested that the matter proceed according to legal procedures.
Mr. Weerapat concluded by reassuring the concerned victims that they should not lose heart, as the plaintiffs in this case will continue to fight in the appeals court. The aim is to demonstrate to the court that all former executives sued are sufficiently involved to initiate a class-action lawsuit. He believes the Zipmex case will help establish a clearer and fairer legal precedent for class-action lawsuits, benefiting all parties. Importantly, even if the class-action lawsuit faces obstacles, the group still has avenues to file civil lawsuits and demand that the government pursue additional criminal charges to bring the perpetrators to justice and ensure compensation for the victims.
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