In a surprising turn of events, Huobi Global has been directed to wrap up its operations in Malaysia, as announced by the Securities Commission Malaysia (SCM) on May 22. Apparently, running a cryptocurrency exchange without the necessary paperwork can lead to quite a headache for operators. In Huobi’s case, it appears no one thought to do the regulatory paperwork!
Why the Closure?
The SCM’s enforcement action stems from Huobi’s failure to register as a legitimate cryptocurrency exchange operator. It seems the authorities were not fond of the idea of unregulated trading in their backyard. So, they issued a stern warning, directing the exchange to deactivate its website and mobile apps from both the Apple Store and Google Play.
Out with the Old, In with the New?
In a twist of fate, Huobi Global underwent a rebranding back in November 2022 after being acquired by About Capital Buyout Fund. But while the new management might be all about compliance and regulations, the SCM nudged Malaysian investors to pack their bags and exit the platform, urging them to withdraw their funds and close their accounts. Talk about a tough breakup!
The Timeline of Trouble
- August 2022: SCM issues an investor alert about Huobi’s operations without proper permissions.
- November 2022: Huobi undergoes rebranding after acquisition, but the past catches up.
- May 2023: SCM orders Huobi to cease operations—better late than never?
What Huobi Has to Say
After the SCM’s announcement, a spokesperson for Huobi was quick to clarify that the recent action refers to the previous operating entity and former shareholders, distancing themselves from their former incarnation’s regulatory failings. They claim that the ‘new and improved’ Huobi is on board with compliance on a global scale. Well, good luck with that!
The Larger Landscape of Crypto Regulation in Malaysia
As it stands, only four companies have been granted recognition as crypto exchange operators in Malaysia, namely Luno Malaysia, MX Global, Sinegy, and Tokenize Technology. Binance previously faced a similar predicament but managed to secure a stable foothold in the market. Just goes to show: in the world of crypto, regulatory approval is the name of the game.
Where Do We Go From Here?
With the rise and fall of exchanges like Huobi, the call for clearer regulatory frameworks has never been louder. Whether Malaysian officials will lean towards stricter regulations or open the floodgates for more exchanges remains to be seen. For now, investors are left in limbo, contemplating their future investments. Talk about a roller coaster!
