SC takes enforcement action against Huobi Global for illegally operating DAX in Malaysia

THE Securities Commission Malaysia (SC) has taken action against Huobi Global Ltd and its CEO Leon Li for operating a digital asset exchange (DAX) in Malaysia without registration.

Accordingly, the SC has issued a public reprimand against Huobi Global and Leon Li for operating illegally in Malaysia.

In addition, the SC has ordered Huobi Global 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.

“Huobi Global has also been directed to cease circulating, publishing or sending any advertisements whether in email or on social media platforms to Malaysian investors,” SC pointed out in a media statement.

“Leon Li as the CEO, has also been specifically ordered to ensure that the above directives are carried out.”

Leon Li (Pic credit: Cryptoslate)

This decision comes after concerns about the platform’s compliance with local regulatory requirements and protecting investors’ interests.

The market regulator views this breach seriously as operating a DAX without obtaining the SC’s registration as a recognised market operator (RMO) is an offence under Section 7(1) of the Capital Markets and Services Act 2007.

In this regard, the SC urged Malaysian investors who have been using Huobi Global to immediately cease trading through its platform, withdraw all their investments and close their accounts.

“Investors are strongly advised to invest and deal with RMOs that are registered with the SC,” it warned.

“Registered RMOs have undergone strict regulatory scrutiny and are required to adhere to strict guidelines so that investors are protected under Malaysia’s securities laws. Those who invest with unlicensed or unregistered entities or individuals are exposed to risks such as fraud and may not be protected under Malaysian securities laws.”

The SC further urged investors to exercise caution when choosing investment platforms and to always do their due diligence before making any investment decisions.

“Additionally, investors should be wary of investment schemes that promise high returns with little risk as they may be too good to be true. By taking these precautions, investors can safeguard their investments and avoid falling victim to fraudulent schemes.” – May 22, 2023

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