SC Takes Action Against Huobi Global For Illegal DAX Operation In Malaysia
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The Securities Commission Malaysia (SC) said that it has taken action and issued a public reprimand against Huobi Global Limited, along with its chief executive officer Leon Li for operating a digital asset exchange (DAX) without registration in the country.

Accordingly, Huobi has been ordered to cease its operations in Malaysia, as well as to stop publishing and circulating advertisements via all channels – such as emails or social media platforms – to Malaysian investors. It is also required to take down its website and mobile application on Apple Store, Google Play, and any other relevant digital application platforms.

Furthermore, the SC also shared that it has specifically ordered Li – as the CEO of the platform – to oversee the execution of these directives (as of the time of writing, Huobi is still available for download on Google Play Store and the App Store).

“This decision comes after concerns about the platform’s compliance with local regulatory requirements and protecting investors’ interests. 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,” said the SC in its statement, adding that Malaysian investors who have been using Huobi should immediately withdraw their investments and close their accounts.

(Image: New Straits Times)

To note, the SC has placed Huobi on its Investor Alert List since 2022 for operating a DAX without registration in Malaysia. At present, there are only four registered RMOs allowed to legally operate in Malaysia, namely Luno Malaysia, MX Global, SINEGY, and Tokenize Technology.

Huobi had also previously committed an offence back in 2020 by making some sweeping statements, such as that it had secured a licence from “Malaysian authorities” to offer local investors a “safe and regulated way to trade cryptocurrencies”. In truth, Huobi was only permitted to operate within the jurisdiction of Labuan, and not the whole country (this requires additional approval).

Finally, the SC also took the opportunity to remind all investors that they should invest with RMOs that are registered with the SC as this means the operators have undergone strict regulatory scrutiny and are obliged to abide by a set of guidelines. It also enables investors to be protected under Malaysia’s securities laws, especially if they are exposed to risks such as fraud.

“Investors should exercise caution when choosing investment platforms and to always do their due diligence before making any investment decisions. Additionally, investors should be wary of investment schemes that promise high returns with little risk, as they may be too good to be true. By taking these precautions, investors can safeguard their investments and avoid falling victim to fraudulent schemes,” said the SC.

(Sources: Securities Commission Malaysia, FintechNews Malaysia)

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