Malaysia’s Securities Commission (SC) has ordered cryptocurrency exchange Huobi to halt its operations in the country. The regulator’s move to shut down the platform comes after it was discovered that the exchange had been operating without a license.
The Securities Commission has warned investors not to trade on unlicensed cryptocurrency exchanges, adding that these platforms were not regulated and that they could potentially put investors’ funds at risk. Huobi, the world’s third-largest cryptocurrency exchange by trading volume, is owned and operated by Huobi Global Limited. The company has been expanding rapidly in Asia, with plans to establish a blockchain centre in Malaysia.
The Commission has stated that it will take legal action against Huobi if it continues to operate in Malaysia without a license. The regulator added that it would also consider imposing fines on the exchange. Malaysia has been taking a tough stance on cryptocurrency exchanges in recent months, with several exchanges being shut down for various reasons.
Huobi’s move to cease operations in Malaysia comes after the exchange announced that it would be expanding its cryptocurrency offerings by launching a new platform that would enable users to trade derivatives. The new platform, called Huobi DM, was set to launch in Malaysia, as well as other jurisdictions. However, the Securities Commission has since prohibited the exchange from continuing these plans.
The Securities Commission has acknowledged the potential benefits of blockchain and cryptocurrency technologies, but it has made it clear that it would only allow companies that operate in the assets to do so within a regulated environment. The regulator’s stance is indicative of a growing trend in the region towards greater scrutiny of blockchain-based companies.
The Commission has been working to create a regulatory framework for the cryptocurrency industry, which it hopes will help to protect investors and prevent fraud. The framework, which was first proposed in July 2019, would require cryptocurrency exchanges to register with the regulator, and would also establish guidelines for initial coin offerings (ICOs).
The Securities Commission has stated that it was willing to work with companies in the industry to ensure that they operate within the framework, and that it was committed to supporting the growth of this new asset class. The body has been exploring ways to support the development of blockchain-based businesses in Malaysia and has even set up a fintech sandbox to encourage experimentation with new technologies.
Despite these measures, however, many companies have been finding it difficult to navigate the regulatory landscape. Some have even chosen to set up operations in more favourable jurisdictions. Huobi, for example, has been expanding its operations in Singapore, which has been known for its more lenient attitude towards cryptocurrency exchanges.
While the move to shut down Huobi’s Malaysian operations may be seen as a blow to the industry, it is important to note that this action is part of a broader trend towards the regulation of cryptocurrency exchanges. As the industry continues to mature, it is likely that regulators will become more involved in overseeing its development.
In the meantime, industry players will need to adapt to the changing regulatory environment and find ways to operate within the confines of the law. This may mean seeking out more favourable jurisdictions or working with regulators to develop new guidelines and regulations. Ultimately, however, it is important that the industry takes steps to protect investors and ensure that the growth of this new asset class is sustainable in the long term.
China-founded cryptocurrency exchange Huobi has been ordered by Malaysia’s securities regulator to close down its website and stop operating in the country after allegedly operating illegally there for the last 18 months without registration. The regulator, The Securities Commission Malaysia, issued a public reprimand against the Chinese exchange and its CEO, Leon Li, and ordered the exchange to stop all operations in the country with immediate effect.
Huobi, which is headquartered in Singapore, has been operating a digital asset exchange platform in Malaysia under the name of Huobi Global for the past year and a half without approval or registration from the regulator. The Securities Commission Malaysia claims that the exchange has been operating a Digital Asset Exchange (DAX) without registering with the authority as required under the relevant laws.
The regulator further stated that Huobi’s website and mobile applications must be disabled, and the exchange must stop all advertising directed at Malaysian investors. The commission has also threatened the exchange with fines and administrative penalties should it fail to comply with the directive.
In recent years, Malaysia has taken a more proactive approach to regulate the cryptocurrency sector and protect investors from potential scams and frauds. The country has been moving towards a regulatory framework for digital currencies since 2018, with the Securities Commission Malaysia playing a critical role in establishing a regulatory environment for the digital asset market.
Huobi’s closure in Malaysia is the latest regulatory action taken against crypto exchanges around the world for non-compliance with relevant regulations. Earlier this year, authorities in Japan issued a warning to Binance, the world’s largest cryptocurrency exchange by trading volume, for operating in the country without proper permission. In 2020, the US Securities and Exchange Commission (SEC) brought charges against Ripple Labs, alleging that the firm’s unregistered XRP token sales amounted to an ongoing illegal securities offering.
The move by Malaysia’s regulator comes at a time when digital assets are gaining more popularity than ever before, with investors looking for alternatives to traditional investment options. The global surge in the valuation of digital assets has led to a regulatory crackdown, with regulators worldwide looking to ensure the proper functioning of the market and protect investors.
In conclusion, Huobi’s closure in Malaysia is a significant blow to the cryptocurrency exchange, particularly given its goals of expanding its presence in Southeast Asia. Its closure is a reminder that regulators worldwide are watching the cryptocurrency market closely and will take action against exchanges that operate without the necessary registration and approvals. The Securities Commission Malaysia’s actions also underscore the importance of regulatory compliance for digital asset exchanges, and the need to abide by relevant laws and regulations to ensure proper functioning of the digital asset market.