The Securities Commission Malaysia (SC) has announced new enforcement actions against digital assets firm Binance.
The cryptocurrency exchange operator has been accused of illegally operating its trading platform in Malaysia. The SC has now ordered Binance to immediately disable access to its website as well as its app within the next 2 weeks or 14 days (from July 26, 2021).
Binance must also cease all forms of media engagement and marketing to Malaysian investors. Additionally, the company must restrict access to the Binance Telegram Group, so that investors in the Southeast Asian country are unable to access it.
The Malaysian SC’s order has been issued against company CEO Changpeng Zhao and the firm’s four registered entities operating in the Cayman Islands, UK, Lithuania, and Singapore.
The Malaysian regulator said the public reprimand was required because Binance has been operating illegally in the country, despite being added to the SC’s investor alert list back in July of last year.
The Securities Commission in Malaysia has now joined many other global regulators who are also cracking down on Binance for engaging in regulated activities in recognized markets, but without adhering to compliance requirements.
In a media statement, CZ stated that he’ll consider stepping down from his role as company CEO as the firm intends to launch several regional headquarters and follow applicable regulatory guidelines.
Investors have been advised to not deal with and invest via illegal or unlicensed cryptocurrency exchanges. The SC in Malaysia has asked those who are maintaining accounts with Binance to immediately stop trading via its platforms and to begin withdrawing their funds as soon as possible.
Securities Commission Malaysia has been increasing its enforcement activities against unregulated operators. In April 2021, the Commission had blocked access to peer-to-peer crypto trading service Remitano.
SC’s Executive Director told Fintech News Malaysia that they’re increasing their enforcement activities against unregulated firms as they’re seeing a significant rise in fraudulent activities.
As reported recently, CZ announced that he would be welcoming regulation.
CZ also said he wants Binance to work cooperatively with regulatory authorities, across the globe, as it establishes its regional headquarters – which is something the company has not taken too seriously in the past.
However, there are now reports indicating that Zhao may resign from his position if his plan to address global regulatory guidelines doesn’t work.
Aaron Tilton, CEO at recently launched crypto platform SmartFi and former Utah State legislator, told CI:
“It seems that certain exchanges who use leverage or margin trading took a position with regulators to get forgiveness instead of permission. From my experience as a state legislator this approach never ends well. This situation has hurt public perception and the crypto industry’s long-term objective of mass user adoption. With maturing markets this kind of friction seems to be unavoidable when billions are being made by these exchanges.”