Today, the Securities Commission Malaysia (SC) has cracked down on illegal digital asset exchange in Malaysia without registration. According to reports, SC has ordered the digital assets exchange Huobi and its chief executive officer (CEO) Leon Li to run the exchange without registration in the country.
In a May 22 statement, the Securities Commission Malaysia (SC) informed that the company Huobi Global Limited has to stop its operations in the country and also it needs to disable its website and mobile applications. Additionally, it needs to cease its operations from the Apple Store, Google Play, and other digital application platforms. The authorities observed that this was a serious violation of the 2007 Capital Markets and Services Act, which mandates that exchanges get licenses from Malaysia’s SC as Recognised Market Operators (RMOs).
Also, the Malaysian regulator has directed investors to move their assets out of the exchange and shut down their accounts registered on the exchange. The decision is taken to shield the investors from any unforeseen potential fraud. Additionally, local laws may seem insufficient in tackling these types of problems because of the absence of legislation.
For those who are not aware, Binance, the largest digital assets exchange in the world had to shut down its operations due to not registering with the authorities. However, in 2022, Binance acquired a substantial stake in the registered Malaysian digital assets exchange, MX Global to conduct its business in the country. By acquiring large stakes in the local digital exchange Binance re-entered the country and conducted its business.
In the press release, the Securities Commission Malaysia urged customers to only deal and invest who are Registered Market Operators (RMOs). The reason behind investing in the RMOs is that they are scrutinized very carefully and authorities keep an eye on them so that investors’ funds are secured under them. Also, it added that investors who work with unregistered or unlicensed companies or people run the risk of falling victim to fraud and may not be covered by Malaysian securities rules.