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The Securities Commission (SC) of Malaysia has directed Huobi Global Limited to cease operations within the country due to its unregistered operation of a cryptocurrency exchange.
The SC took action against Huobi and its CEO, Leon Li, for engaging in illegal activities in Malaysia.
The regulator stated on Monday that this decision was made due to concerns regarding the platform’s compliance with local regulations and the protection of investors’ interests. It emphasized that operating a digital asset exchange without proper registration is a violation under section 7(1) of the Capital Markets and Services Act 2007.
The Malaysian SC has instructed Huobi to disable its website and mobile apps within the country and refrain from advertising to Malaysian investors. Additionally, the SC has advised Huobi’s Malaysian users to withdraw their investments from the platform and close their accounts. The regulator has specifically ordered CEO Leon Li to ensure compliance with these directives.
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In October 2022, Huobi announced the sale of its controlling stake to About Capital Management’s M&A fund, a Hong Kong-based investment company. The controlling shareholder’s identity was not disclosed in Huobi’s announcement. However, reports had previously suggested that Leon Li was seeking a buyer for his nearly 60% stake in the company, with a minimum price of $1 billion.
While there were claims that Justin Sun, who holds a significant role in the exchange, was the buyer, he continues denying these allegations.
The SC’s enforcement action coincides with Sun’s efforts to revitalize Huobi by listing meme coins. Sun has also accused Leon Li’s younger brother, Li Wei, of receiving millions of free Huobi (HT) tokens and making a profit of $7.45 million in the process. Sun is urging Wei to return the profits and destroy his remaining tokens, as Wei has no involvement in Huobi’s development.