Securities Commission Malaysia (SCM) ordered the crypto exchange Huobi Global to stop operations in the country, stating the firm failed to register its business properly
The official statement from Securities Commission Malaysia (SCM) from May 22 announced that Huobi Global crypto company failed to register as a cryptocurrency exchange operator and must cease all activity in the country.
The enforcement action from Malaysia’s securities regulator orders the exchange to disable its website and mobile applications on Apple Store and Google Play, as well as stop advertising its products and services to Malaysian users via emails and social media. Simultaneously, local customers are advised to stop trading on the platform, withdraw funds and close their accounts.
The reason is that Huobi failed to obtain proper SCM registration. Although the regulator states Huobi doesn’t comply with local regulatory requirements, the exchange itself denies the allegations, saying that the situation described in the statement refers to the previous Huobi entity and former shareholders, but is not associated with the current Huobi platform and its modern compliance policies.
In October 2022, it was reported that the controlling shareholders of Huobi Global completed transactions to sell their entire shareholdings to About Capital Management, a Hong Kong-based fund management firm. However, the buyer behind the acquisition of the crypto exchange giant was TRON founder Justin Sun, who became “a global advisor to Huobi.” Over the past few months, Sun has taken on a leadership role at Huobi, denying the rumours that he aimed to sell his stake to Binance.
Back in August 2022, the SCM warned local investors stating that the Huobi exchange was operating without the necessary permissions in the country. Apparently, the company which initially launched a brokerage firm called Huobi Labuan in Malaysia in November 2020, operated based on a temporary nine-month license allowing it to offer cryptocurrency spot and derivatives trading.
Having conducted discussions with Malaysian regulators about its regional operations for a while, Huobi couldn’t manage to renew its license and receive permanent permissions to provide services in the country.
At the beginning of 2023, there were rumours that Huobi is nearing insolvency. The company denied the allegations, although it laid off 20% of employees at the time.
In 2021, another major cryptocurrency exchange Binance was also ordered to cease operations in the region quoting the same reason – the absence of the necessary regulatory approval.