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Huobi Global, one of the leading crypto exchange, has been ordered by the Malaysian authorities to shut down its Malaysian operations. The action came from the Security Commissions Malaysia (SCM) after the company didn’t register as a legal crypto exchange operator according to Malaysian rules.
The authorities have commanded the firm to cease all activities and disable its website and mobile apps on Google Play and Apple Stores. The Seychelles-based crypto exchange Huobi was operating the digital asset exchange without a Recognized Market Operator (RMO) license. Not adhering to these rules may lead to offense charges under the Capital Markets and Services Act, 2007.
SCM Orders To Stop All Activities
Since Huobi’s compliance with the local regulatory requirements was questionable, SCM focused on protecting investors’ interests by directing Huobi’s founder Leon Li to halt all operations. The company’s chief executive is commanded to cease communication with Malaysian investors, withdraw the app from respective Play stores, wind up the local operations, and disable the website.
Additionally, the exchange is also ordered to not advertise any products or services to Malaysian users through their email addresses and social media.
Huobi’s Stance on the Enforcement
According to some reports, a company spokesperson stated the following about the recent SCM enforcement action, “In response to recent reports, we would like to clarify that the situation outlined pertains to the previous Huobi entity and former shareholders. It is not associated with the current Huobi platform, which adheres to strict regulatory compliance globally.”
Earlier, in November 2022, Huobi Global underwent rebranding after About Capital Buyout Fund acquired the company. Thus, they claim that the enforced rule does not affect the rebranded company following the ownership change.
Thus, after the public announcement, Huobi has indicated their meeting plans with Malaysian authorities about their regional processes.
Huobi Vs. Malaysian Authorities
Huobi Global and SCM have been in each other’s hair for a long time now, specifically since August 2022. The authorities were alerted after an investor pointed out that the exchange wasn’t functioning with full legal permissions and rules.
Huobi entered the Malaysian market as a brokerage firm called Huobi Labuan in November 2020. They worked for a temporary nine months and offered spot and derivatives trading for cryptocurrencies.
Even the most popular crypto exchange platform, Binance, suffered the same fate in 2021 and was commanded to cease operations. However, this platform acquired a significant state in the regulated platform, MX Global, to place itself in the Malaysian market strongly.
Currently, the SCM website has only four cryptocurrency exchange operators registered and recognized per the laws. The August 2022 list has MX Global, Luno Malaysia, Tokenize Technology, and Sinegy.
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