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Malaysia’s leading securities regulator, the Securities Commission (SC), today announced that it has ordered Seychelles-based crypto exchange Huobi to shutter operations in the country.
It appears Huobi has fallen foul of Malaysian regulators for operating a digital asset exchange without registration, according to the announcement. Running a crypto exchange without a Recognised Market Operator (RMO) license is an offense under the Capital Markets and Services Act 2007.
A public reprimand has also been issued against the exchange and its founder Leon Li. As the company’s chief executive, Li has been ordered to oversee the process of winding down local operations, ceasing communications with Malaysian investors, disabling the website, and withdrawing the app from app stores.
The regulator’s announcement says the enforcement action was taken “after concerns about the platform’s compliance with local regulatory requirements and protecting investors’ interests.”
Decrypt reached out to the SC and Huobi for further comment but did not receive an immediate response.
Malaysia’s first steps
Malaysia is not the first country anyone would associate with the global crypto arms race and this is reflected in the dearth of crypto news coming from the Southeast Asian country, but that might change soon.
In September 2021, the Malaysian central bank joined a trial with the Bank for International Settlements, and in January it announced it was working on a proof of concept "to enhance our technical and policy capabilities, should the need to issue [a] CBDC arise in the future."
A CBDC is a Central Bank Digital Currency—essentially a centrally-issued digital asset that derives its value from the legal tender of a nation.
More recently, in March, Malaysia’s Deputy Minister of Communications and Multimedia Zahidi Zainul said the country should recognize Bitcoin as legal tender: "We hope the government can allow this," he told Parliament in response to a question from the opposition.