Malaysia slaps Huobi and its CEO with regulatory warning
Crypto exchange Huobi and its CEO has been slapped with an enforcement action by Malaysia’s Securities Commission Malaysia (SC) and was ordered to stop operating in the country.
The Securities Commission (SC) said that the leading crypto exchange Huobi and its associated brands are carrying out unlicensed capital market activities. Huobi, a former ‘big three’ platform in China, is the sixth-largest crypto exchange in the world by trading volume, competing with the likes of Coinbase, Binance and Kraken.
Notably, Huobi Global’s CEO Leon Li was also mentioned by name to ensure that the SC’s directives are carried out.
“In addition, the SC has ordered Huobi Global Limited to stop its operations in the country, including to disable its website and mobile application on several platforms such as Apple Store, Google Play and any other digital application platform,” the statement reads.
Malaysian regulator said Huobi has continued to operate illegally in Malaysia despite being included in the SC’s caution list back in July 2020. The alert list includes persons or entities that carry on regulated activities or those providing services as a market maker without proper approval, authorisation or recognition.
The watchdog advises its citizens not to make use of such services nor to make any investment with companies or individuals that are not approved or licensed by the SC.
Anyone who engages in regulated activities without a valid license or SC’s registration as a Recognised Market Operator (RMO) is committing an offence under the Capital Markets and Services Act 2007. If convicted, they may be punished with imprisonment of up to ten years and fined.
Earlier this year, Justin Sun said in a recent interview that Huobi applied for a license that allows it to offer crypto trading services in Hong Kong as the Chinese territory pushes to become a hub for digital assets.
In a major shift, the crypto entrepreneur also revealed that Huobi’s Asia headquarters will be relocated from Singapore to Hong Kong. The founder of blockchain network TRON explained that the venture includes launching a new exchange in Hong Kong, aptly named Huobi Hong Kong.
Huobi was acquired in October by About Capital, a Hong Kong-based fund management firm started by Ted Chen, who founded China’s hedge fund giant Greenwoods Asset Management. Earlier this year, Bloomberg reported that the founder Leon Li was looking to sell his majority stake for over $1 billion, valuing the exchange at $3 billion.
Following the transition of ownership, the exchange embraces a series of new international brand promotion and business expansion initiatives. This includes a global strategic advisory board alongside an injection of capital for a margin and risk provision fund.