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Crypto Exchange Huobi Ordered to Halt Operations in Malaysia

Malaysia’s Securities Commission announced Huobi to shut down its local operations due to compliance concerns.

The Securities Commission (SC), Malaysia’s leading securities regulator, ordered Seychelles-based crypto exchange Huobi to close down operations in the country, in an announcement made today.

Crypto exchange Huobi has gotten on the bad side of Malaysian regulators as it apparently was operating a digital asset exchange without registration, according to the SC.

The SC says that running a digital asset exchange in Malaysia without a Recognised Market Operator (RMO) licence is an offence under the Capital Markets and Services Act of 2007.

Additionally, a public reprimand has been issued against Huobi and its founder Leon Li. The SC has ordered Li, as Huobi’s chief executive, to oversee the process of closing up shop for local operations, ceasing communication with Malaysian investors, disabling its website, and withdrawing its applications from app stores.

The SC says that they decided to take enforcement action against Huobi “after concerns about the platform’s compliance with local regulatory requirements and protecting investors’ interests.”

While a private crypto business has been ordered to close its doors, the Malaysian central bank has been making slow but steady progress in incorporating crypto and distributed ledger technology to move the country towards a digital economy.

In 2021, the Malaysian central bank joined a trial from the Bank for International Settlements, announcing in January this year that it is currently working on a proof of concept “to enhance our technical and policy capabilities, should the need to issue [a central bank digital currency]  arise in the future.”

A central bank digital currency, known as CBDC, is a digital asset issued by a central bank, and derives its value from a jurisdiction’s legal tender.

In March, Malaysian Deputy Minister of Communications and Multimedia Zahidi Zainul said that Malaysia should recognise Bitcoin as legal tender, stressing that he hopes the government “can allow this,” to Parliament, in response to opposition.

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