- Huobi Global and its CEO face regulatory action in Malaysia for operating without registration.
- The Securities Commission ordered the closure of operations and the cessation of advertising in the country.
- Huobi claims that the situation concerns the former entity and that they are currently compliant with global regulations.
The Securities and Exchange Commission of Malaysia clamped down on Huobi Global and its CEO, Leon Li, alleging that they are “working illegally” in the country.
Indeed, as is known this Monday, May 22, the Securities Commission of the Southeast Asian country ordered Huobi Global Limited to close its operations since, according to the stock exchange control body, it operates without registration.
“The decision comes about due to concerns about the compliance of the Huobi platform with local regulatory requirements and the protection of investor interests,” the regulator said in a statement.
In the text, it says that exchanging digital assets without being registered is a crime, according to the Capital Markets and Services Law of that country.
The Securities and Exchange Commission of Malaysia said that Huobi it must “disable its website and mobile apps” in the country, as well as “cease any advertising to Malaysian investors.”
“Leon Li, as CEO, has also been specifically directed to ensure that Houbi’s cessation of operations in Malaysia is carried out,” the statement said.
In parallel, the Securities and Exchange Commission urged Huobi users in Malaysia to “Withdraw all your investments from the platform and close your accounts.”
Huobi Global ordered to stop operations in Malaysia by the Securities Commission https://t.co/BM0T6wdzl5
— The Block (@TheBlock__) May 22, 2023
They assure that Huobi no longer operates in Malaysia
Justin Sun, founder of Tron and adviser to Huobi, told The Block that the exchange does not operate in Malaysia.
He also added that Leon Li is not the CEO of Huobi and the company does not currently have a CEO role.
“We would like to clarify that the situation described refers to Huobi’s former entity and former shareholders. This is not associated with Huobi’s current platform, which adheres to strict regulatory compliance globally.” Sun said of the statement from the Securities and Exchange Commission of Malaysia.
In October 2022, Huobi announced that the company’s “majority shareholder” had agreed to sell its stake to Hong Kong-based investment firm About Capital Management’s M&A fund.
While Huobi did not name a majority shareholder, the news came after reports that Leon Li was looking for a buyer for his nearly 60 percent stake in the company and was asking for at least $1 billion.
While all indications are that Sun, who clearly has a significant role in the exchange, was the actual buyer, he continues to deny this.
Founded in 2013, Huobi is the fourth largest cryptocurrency exchange in the world by trading volume.
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