Malaysian regulator orders Huobi Global to shut down. Why?
The Malaysian government seems to have raised the bar like the U.S. in scrutinizing digital assets exchanges. The digital assets exchange Huobi Global Limited and its Chief Executive Officer Leon Li are facing legal actions issued by the Securities Commission Malaysia (SC). The authority stated that Huobi is operating a digital asset exchange (DAX) in Malaysia without registration. Hence, tagged Huobi Global Limited’s operations illegal, and issued a public reprimand for both the exchange and its CEO.
Alongside halting operations in Malaysia as per SC’s order, Huobi is required to disable its website and mobile application on digital application platforms like the Apple App Store and Google Play Store.
Moreover, Huobi Global Limited will not be circulating, publishing or sending any advertisements, whether in email or on social media platforms, to Malaysian investors, SC ordered.
The directives given are to be carried out accordingly by the CEO, Leon Li as specifically ordered by SC.
Huobi’s compliance with local regulatory requirements and protection of investors’ interests raised a concern and preceded the SC’s decision. The press release on the order detailed that “SC views this breach seriously, as operating a DAX without obtaining the SC’s registration as a Recognised Market Operator (RMO) is an offence under Section 7(1) of the Capital Markets and Services Act 2007.”
All Malaysian investors using Huobi Global Limited are to withdraw their investments, close their accounts and refrain from using the platform, SC ordered.
If need be for any investments, investors should deal with RMOs registered with the SC, as “they have undergone strict regulatory scrutiny and are required to adhere to strict guidelines so that investors are protected under Malaysia’s securities laws,” SC said. However, any action otherwise may not be protected by Malaysian law.
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