Huobi Ordered to Cease Operations by Malaysian Securities Regulator

Huobi Ordered to Cease Operations by Malaysian Securities Regulator

Malaysia’s securities regulator orders Huobi to cease all operations in the country due to compliance concerns over the exchange’s failure to register its digital asset exchange before commencing operations.

Malaysia’s securities regulating authority, the Securities Commission, has ordered digital currency exchange Huobi to cease all operations in the country. 

The action came after the regulating authority raised compliance concerns, stating that it had failed to register its digital investment exchange before commencing operations. 

All Activity To Be Stopped 

Huobi Worldwide appears to have fallen foul of the country’s securities regulating authority. The Securities Commission Malaysia announced an official statement on the 22nd of May, stating that Huobi Worldwide had failed to register as a digital currency exchange operator in the country. In doing so, the exchange must shutter all operations in the country. Furthermore, the Securities Commission likewise directed Huobi to disable its mobile app  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. 

Reports by the regulatory authorities in Malaysia, operating a digital currency exchange without a Recognised Market Operator (RMO) license counts as an offense under the country’s Financial 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 the procedure of Huobi winding down its operations in the country. 

Compliance Issues 

The Securities Commission Malaysia, in its communication, stated that its decision was driven by concerns about Huobi’s 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. 

Huobi Worldwide has been in the sights of Malaysian regulatory authorities since August 2022. And once, the Securities Commission Malaysia had announced an investor warning sounding out users that the exchange was operating without the requisite permissions. 

Huobi Responds 

Huobi Worldwide had recently undergone a complete rebranding in 2022 following its acquisition by About Financial resources Buyout Fund. Following reports of the enforcement action by the Securities Commission Malaysia, a Huobi spokesperson made it clear that the present order does not pertain to the Huobi that is operational after the change in ownership. 

“ As a 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 the present Huobi platform, which adheres to strict regulatory compliance universally. “

A Difficult Space To Operate In 

After the  initial notice, Huobi had stated 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 digital currency spot and derivatives trading. In 2022, Binance Crypto exchange eventually  managed to win a foothold in the Malaysian cryptocurrency space by acquiring a stake in trading platform MX Global. 

A Malaysian CBDC? 

In 2021, Malaysia’s Monetary Authority announced that it was working on a Proof-of-Concept to 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 Monetary Authority Digital currency, is a digital investment announced by the monetary authority and gets its  price from a nation’s legal tender. In March, Zahidi Zainul, Deputy Minister of Communications and Multimedia, indicated that the country must recognize Bitcoin (BTC) as a legal tender

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