3 - 5 minute read
Huobi Global Ordered to Cease Operations in Malaysia
Huobi Global, a cryptocurrency exchange, has been directed to shut down its operations in Malaysia by the country’s securities regulator. Securities Commission Malaysia (SCM) issued an official statement on May 22 stating that Huobi Global failed to register as a cryptocurrency exchange operator and must cease all activity. The regulator has also directed Malaysian investors to stop trading on the platform, withdraw funds, and close their accounts. The cryptocurrency exchange is expected to cease advertising its products and services to Malaysian users via email and social media.
“In response to recent reports, we would like to clarify that the situation outlined pertains to the previous Huobi entity and former shareholders. This is not associated with the current Huobi platform, which adheres to strict regulatory compliance globally. “
The SCM’s decision was driven by concerns about Huobi’s compliance with local regulatory requirements. The regulator noted that it had been monitoring the exchange since August 2022, after issuing an investor alert stating that the exchange was operating without the necessary permissions in the country. SCM has only recognized four companies as recognized cryptocurrency exchange operators, including Luno Malaysia, MX Global, Sinegy and Tokenize Technology.
Huobi Global underwent a rebranding in November 2022 following the company’s acquisition by About Capital Buyout Fund the previous month. Following news of the SCM’s enforcement action, a company spokesperson clarified that the situation outlined pertains to the previous Huobi entity and former shareholders. The spokesperson noted that this is not associated with the current Huobi platform, which adheres to strict regulatory compliance globally.
Despite the clarification, this incident raises concerns about regulatory compliance in the cryptocurrency industry. With the increasing adoption of cryptocurrencies, more and more countries are developing regulations to protect investors and prevent illicit activities, such as money laundering and terrorism financing. The lack of regulatory compliance by cryptocurrency exchanges poses a risk to investors and can undermine the stability of the entire market.
The regulation of cryptocurrencies has been a hotly debated topic, with some arguing that it should be left unregulated to maintain its decentralized nature, while others believe that regulation is necessary to promote its adoption and protect investors. Malaysia has taken a cautious approach to cryptocurrencies, as evidenced by its limited list of recognized cryptocurrency exchange operators.
The Bottom Line
The actions taken by Securities Commission Malaysia against Huobi Global highlight the importance of regulatory compliance in the cryptocurrency industry. Traders and investors should be wary of cryptocurrency exchanges that operate without the necessary regulatory approval. The lack of regulatory compliance can pose risks to investors and undermine the stability of the entire market. As more and more countries develop regulations to protect investors, traders should stay informed and comply with all necessary regulations to avoid regulatory action.