In a significant development, Huobi Global Limited, a leading cryptocurrency platform, along with its Chief Executive Officer, Leon Li, find themselves in hot water as they face charges by the Securities Commission of Malaysia (SC). The duo is accused of running an unregistered digital asset exchange (DAX), triggering to complete shutdown of Huobi’s services in Malaysia.
🔒 SC has issued a public reprimand against Huobi Global Limited to cease operations in Malaysia, disable website and mobile app on platforms like Apple Store and Google Play.
— SC Malaysia (@SecComMalaysia) May 22, 2023
Malaysian Regulator’s Order and Huobi’s Potential Countermeasures
The Malaysian regulator is tightening the reins, demanding Huobi halt all promotional efforts aimed at Malaysian users. This includes distribution of advertising materials across social media channels and email. The cryptocurrency platform is also under pressure to remove its applications from all distribution outlets, such as the Apple Store and Google Play. Li, as the head of Huobi, bears the responsibility to ensure total compliance with these stringent measures, indicating the seriousness of the predicament.
Huobi’s Acquisition Saga with Justin Sun
The complexity of the situation is further compounded by the supposed acquisition of Huobi by Justin Sun, TRON’s founder. Sun reportedly invested a staggering $1 billion to secure a controlling stake in the platform through About Capital, a Hong Kong-based asset management company, back in November. However, Sun has since disputed these allegations, denying any majority ownership in the crypto exchange.
The Status of Huobi Token Amid the Turbulence
Despite the crisis, Huobi Token (HT), Huobi Global’s proprietary token, has managed to hold its ground with a modest 0.8% rise in its price, reaching an average value of $2.92 over the past day. However, the 24-hour trading volume saw a downturn, plummeting by 14% to $16.6 million.
Concerns over Huobi’s Regulatory Compliance
The Malaysian SEC’s action is largely driven by worries over Huobi’s compliance with local regulations. According to the SEC, Huobi has been conducting its DAX operations without registering as a Recognised Market Operator (RMO), a mandate under the Capital Markets and Services Act 2007. This disobedience could have severe legal consequences for Huobi in Malaysia.
Given these revelations, the global crypto community remains vigilant, eagerly observing the unfolding scenario and the potential ripple effects on the wider cryptocurrency market.