31 Jul - 2 min read
The Securities Commission of Malaysia has announced that it is taking enforcement actions against the world’s largest cryptocurrency exchange, Binance, for illegally operating in Malaysia. The body also urged Malaysian Binance users to stop using the platform and withdraw their investments.
According to the SC, Binance violates Sections 7(1) and 34(1) of the Capital Markets and Services Act 2007 for operating a Digital Asset Exchange (DAX) without registering as a Recognized Market Operator with the SC. As such, Binance is deemed to be illegally operating in Malaysia, and since July 2020 Binance has been on the SC’s Investor Alert List.
The enforcement actions against Binance include the following:
In Malaysia, there are only three DAX that are Recognized Market Operators licensed by the SC: Luno, Tokenize, and SINEGY.
Malaysia isn’t the first country that has issued caution against Binance; as the largest crypto exchange in the world, various countries have either opened investigations or stated that its operations were illegal in those countries. To meet regulations, Binance has previously created separate entities specifically catered to a single market, such as Binance.US and Binance Singapore, among others. As for Malaysia, Binance has not yet issued a response on this matter.
At present, it is unclear to Binance users in Malaysia what will happen to their existing investments on the platform. While there is no publicly available data on the amount of Binance users in Malaysia, checks with various user groups and discussions online revealed plenty of unease. Some have begun panic-selling their investments, while many others remain hesitant to do so, mainly due to current paper losses. Another cause of hesistance is that Binance offers a wider range of tokens to trade, some of which are not available on other DAXes, making transferring the assets complicated – if not impossible.
Nevertheless, Malaysian Binance users have until mid-August to make a decision. Hopefully, Binance would issue a statement to its Malaysian users before then.
(Source: Securities Commission Malaysia)
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