The Malaysian Securities Commission announced on Monday that it has launched legal action against Huobi Global and Leon Li, its CEO, for running a cryptocurrency exchange without first registering.
A public reprimand was given by the Securities Commission Malaysia (SC), which is in charge of overseeing the regulation of securities and digital assets, criticizing Huobi for conducting business “illegally.”
Since operating without being recognized as a “Recognised Market Operator,” which is considered a major infraction under the Capital Markets and Services Act, Huobi has been on the agency’s investor alert list since last year.
Huobi has been ordered by the SC to cease all operations in the vicinity and to deactivate all of its mobile applications and websites on different platforms, including the Apple and Google app stores. Furthermore, it must stop advertising to local investors.
According to the agency, Huobi Global Limited users in Malaysia are urged to stop trading immediately, withdraw all of their money, and deactivate their accounts.
Earlier this year, advisor Justin Sun proposed Huobi look into moving its Asian headquarters from Singapore to Hong Kong.
Only transact with market players who have been granted authorization by the watchdog, the SC urged investors. The caution warned that anyone who invests in unlicensed or unregistered businesses or individuals runs the danger of becoming the victim of fraud and may not be covered by Malaysian securities rules.
Investors should exercise caution when considering investment plans that promise substantial returns with low risk since they can be unreliable, according to the regulator. Investors may protect their money and stay safe from scams by adopting these safeguards.
Since August 2022, when the SCM published an investor advisory warning that the exchange was operating illegally in Malaysia, Huobi Global has been the target of the country’s securities authority.
Huobi stated that it was in talks with Malaysian officials concerning its regional activities following the public revelation. To provide spot and futures trading for cryptocurrencies, the business first formed a brokerage firm called Huobi Labuan in November 2020 for a brief nine-month period.
Binance, a cryptocurrency exchange, was able to get an entry into the Malaysian market in 2022 by investing in the licensed trading platform MX Global. Midway through 2021, Binance encountered an identical problem as Huobi, receiving a directive to stop operations in the area due to a lack of regulatory license.