Amidst stringent regulations in the crypto business sphere, the Securities Commission (SC) of Malaysia has taken legal action against the leading crypto exchange, Huobi Global Limited, and its CEO, Leon Li.
According to The Block report, the SC has ordered the exchange to cease its operations in the neighboring country.
The SC justified its decision by stating that Huobi had been running a crypto exchange without proper registration, which is a violation of the Capital Markets and Services Act 2007.
Huobi Prohibited from Operating in Malaysia
The SC’s decision was driven by concerns over Huobi’s compliance with local regulatory requirements and investor protection.
As part of the enforcement action, Huobi has been directed to disable its website and mobile applications in Malaysia, as well as cease any advertisements targeting Malaysian investors.
Leon Li has also been specifically instructed to ensure compliance with these directives. The SC has urged Huobi users in Malaysia to withdraw all their investments from the platform and close their accounts.
Interestingly, Justin Sun, the founder of Tron and an advisor to Huobi, has claimed that Huobi is not currently operating in Malaysia. He also stated that Leon Li is not the CEO of Huobi and that the company does not currently have a CEO role.
“In response to recent reports, we want to clarify that the situation described relates to the previous entity and former shareholders of Huobi. It is not related to the current Huobi platform, which complies with strict global regulatory compliance,” said Sun.
Additionally, Sun stated that the crypto exchange is committed to providing a safe, secure, and compliant trading environment for its users worldwide.
Hotbit Shuts Down
On the other hand, the crypto exchange Hotbit has closed its trading platform following a criminal investigation. The exchange cited changing trends in the crypto industry, including a series of failures and bankruptcies, as reasons for its decision.
AMB Crypto reported that Hotbit also experienced repeated cyber attacks and exploits in decentralized financial projects, resulting in significant losses for the exchange.
This incident highlights the regulatory challenges faced by crypto exchanges operating in jurisdictions with strict regulatory frameworks.
They emphasized the importance of compliance with local laws and regulations, especially those related to registration and investor protection.
“We believe that centralized exchanges (CEX) are becoming increasingly complicated, with highly complex and interconnected businesses that are difficult to comply with, whether for compliance or decentralization, and unlikely to meet long-term trends,” stated Hotbit.
Following these developments, investors are advised to exercise caution when choosing investment platforms and always DYOR (Do Your Own Research) before making investment decisions.
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