Malaysia’s market regulator the Securities Commission (SC) has asked cryptocurrency exchange Huobi Global to stop its operations in the country, and pulled up the exchange and its chief executive officer Leon Li for operating a digital asset exchange (DAX) without registration, in an announcement Monday. The SC also urged Malaysian users on the platform to immediately cease trading, withdraw all investments and close accounts.

See related article: Malaysia to get its own national public blockchain

Fast facts

  • “The 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,” the SC said.
  • The regulator has asked Huobi Global to refrain from circulating, publishing or sending any advertisements to Malaysian investors through email or social media. It has also asked Huobi to disable its website and mobile application on platforms including Apple Store and Google Play.
  • The SC pointed out that registered RMOs undergo rigorous regulatory scrutiny and are required to follow strict guidelines which enables investors to be protected under Malaysia’s securities laws. 
  • This is not the first time the SC has charged Huobi for operating in the country without a registration. On Aug. 22 last year, the regulator said it added Huobi Global to SC’s investor alert list for operating without registering with the SC.
  • Huobi said in its user agreement that users from nine jurisdictions are prohibited from using its services, including mainland China, U.S. and Singapore, while users from 13 jurisdictions are banned from trading in derivatives, including the U.K., New Zealand, and China.
  • Huobi, which announced plans in November to increase investments in Southeast Asia and Europe as part of its global expansion, said in January that it was cutting 20% of its staff.
  • In February, the exchange said it would relocate its Asia headquarters from Singapore to Hong Kong, and would increase its headcount from 50 to 200 in Hong Kong. 
  • See related article: Ant Group, Malaysian investment bank Kenanga develop crypto wealth app