Malaysiaโs securities regulatingย authority, the Securities Commission, has ordered digitalย currency exchange Huobi to cease all operations in the country.ย
The action came after the regulatingย authority raised compliance concerns, stating that it had failed to register its digital investment exchange before commencing operations.ย
All Activity To Be Stoppedย
Huobi Worldwide appearsย to have fallen foul of the countryโs securities regulatingย authority. The Securities Commission Malaysia announced an official statement on the 22nd of May, stating that Huobi Worldwide had failed to register as a digitalย currency exchange operator in the country. Inย doingย so, the exchange must shutter all operations in the country. Furthermore, the Securities Commission likewise directed Huobi to disable its mobile appย on Google Play Store and Apple Store and disable its website. The exchange is likewise expected to stop all advertising related to its services and products targeted at Malaysian users via social media and email.ย
Reportsย by the regulatoryย authorities in Malaysia, operating a digitalย currency exchange without a Recognised Market Operator (RMO) license counts as an offense under the countryโs Financialย resources Markets and Services Act 2007. The authorities likewise announced a public reprimand against the exchange and its founder Leon Li. Li is likewise expected to oversee theย procedure of Huobi winding down its operations in the country.ย
Compliance Issuesย
The Securities Commission Malaysia, in its communication, stated that its decision was driven by concerns about Huobiโs compliance with local regulatory requirements. With the exchange failing to get SCM registration, authorities have directed investors to stop all trading activity on the platform, withdraw their funds, and close all accounts.ย
Huobi Worldwide has been in the sights of Malaysian regulatoryย authorities since August 2022. Andย once, the Securities Commission Malaysia had announced an investor warning sounding out users that the exchange was operating without the requisite permissions.ย
Huobi Respondsย
Huobi Worldwide had recently undergone a complete rebranding in 2022 following its acquisition by About Financialย resources Buyout Fund. Following reports of the enforcement action by the Securities Commission Malaysia, a Huobi spokesperson madeย itย clearย that theย present order does not pertain to the Huobi that is operational after the change in ownership.ย
โ Asย aย result to recent reports, we would like to clarify that the situation outlined pertains to the previous Huobi entity and previous shareholders. This is not associated with theย present Huobi platform, which adheres to strict regulatory compliance universally. โ
A Difficult Space To Operate Inย
Afterย theย initial notice, Huobi had statedย that it was locked in discussions with Malaysian authorities regarding its regional operations. In November 2020, the company launched Huobi Labuan, a brokerage company that had a short-term window to offer users digitalย currency spot and derivatives trading. In 2022, Binanceย Cryptoย exchange eventuallyย managed toย win a foothold in the Malaysian cryptocurrency space by acquiring a stake in trading platform MX Global.ย
A Malaysian CBDC?ย
In 2021, Malaysiaโs Monetaryย Authority announced that it was working on a Proof-of-Concept toย assist strengthen its technical and policy capabilities, should it issue a CBDC in the future. It likewise joined a trial with the Bank for International Settlements. A CBDC, or Monetaryย Authority Digitalย currency, is a digital investment announced by the monetaryย authority and gets itsย price from a nationโs legal tender. In March, Zahidi Zainul, Deputy Minister of Communications and Multimedia, indicatedย that the country must recognize Bitcoinย (BTC) as a legal tender.ย
