Huobi Global has been ordered to close its operations in Malaysia following an enforcement action from the country’s securities regulator.
According to an official statement from Securities Commission Malaysia (SCM) on May 22, Huobi Global failed to register as a cryptocurrency exchange operator and must cease all activity. The company has been directed to disable its website and mobile applications on Apple Store and Google Play.
The cryptocurrency exchange is also expected to cease advertising its products and services to Malaysian users via email and social media.
SCM noted that its decision was driven by concerns about Huobi’s “compliance with local regulatory requirements.“ Having failed to obtain SCM registration, the regulator has also directed Malaysian investors to stop trading on the platform, withdraw funds and close their accounts.
Huobi Global underwent a rebranding in November 2022 following the company's acquisition by About Capital Buyout Fund the previous month. Following news of the SCM's enforcement action, a company spokesperson told Cointelegraph the order does not pertain to Huobi that continues to operate following last year's change in ownership:
"In response to recent reports, we would like to clarify that the situation outlined pertains to the previous Huobi entity and former shareholders. This is not associated with the current Huobi platform, which adheres to strict regulatory compliance globally. "
Huobi Global has been in the crosshairs of the Malaysian securities regulator since August 2022, after the SCM issued an investor alert stating that the exchange was operating without the necessary permissions in the country.
Following the public announcement, Huobi indicated that it was in discussions with Malaysian regulators about its regional operations. The company initially launched a brokerage firm called Huobi Labuan in November 2020 with a temporary nine-month period to offer cryptocurrency spot and derivatives trading.
In 2022, cryptocurrency exchange Binance managed to secure a foothold in the Malaysian market by acquiring a stake in regulated trading platform MX Global. Binance had found itself in a similar situation to Huobi midway through 2021, being ordered to cease operations in the region for not having the necessary regulatory approval.
According to the SCM website, just four companies are registered as recognized cryptocurrency exchange operators. This includes Luno Malaysia, MX Global, Sinegy and Tokenize Technology. The list was last updated in August 2022.