Malaysia Launches Enforcement Action Against ‘Illegally Operating’ Binance

In brief

• Malaysia’s financial services regulator has taken enforcement action against Binance.
• The Securities Commission has said Binance is still operating illegally despite being listed on an alert list since July 2020.

The Malaysia Securities Commission (SC) has today taken enforcement action against Binance for allegedly operating illegally in the country.

The SC claims the crypto exchange is operating illegally as a Digital Asset Exchange, without the requisite registration requirements found in Sections 7(1) and 34(1) of the Capital Markets and Services Act 2007.

“Accordingly, the SC has issued a public reprimand against Binance for continuing to operate illegally in Malaysia despite being included in the SC’s Investor Alert List in July 2020,” the SC said.

Enforcement action against Binance

The SC has taken enforcement action against four affiliated entities, as well as the firm’s CEO Changpeng Zhao (CZ).

The four Binance entities are Binance Holdings Limited, Binance Digital Limited, Binance UAB, and Binance Asia Services Pte Ltd.

All four entities have been ordered to disable the website (www.binance.com) and mobile applications within 14 business days from July 26, 2021. In addition, all four entities must immediately cease media and marketing activities, and immediately restrict Malaysian investors from accessing the crypto exchange’s Telegram group.

CZ has additionally been ordered to ensure the above obligations are met.

The SC rounded off its announcement of the above enforcement action with a consumer warning.

“Investors are advised to stop dealing with and investing through illegal digital asset exchanges. Those who currently have accounts with Binance are strongly urged to immediately cease trading through its platforms and to withdraw all their investments immediately.”

When it rains, it pours

This is not the only regulatory headache that the world’s largest crypto exchange is facing.

Elsewhere in the world, regulators from the Cayman Islands, Italy, Japan, and others have taken aim at the crypto exchange, claiming or warning — much like Malaysia — that the exchange is not registered to operate legally in their respective jurisdictions.

In the U.K., the Financial Conduct Authority recently issued a consumer warning over Binance Markets Limited, citing concerns over the entity’s apparent lack of anti-money laundering standards, as well as citing a concern over the firm’s lack of a headquarters.

A spokesperson for Binance told Decrypt in a prepared statement that, “We are aware of the notice from SC and can confirm that Binance.com does not operate out of Malaysia.” The spokesperson added that the exchange “takes a collaborative approach in working with regulators” and that it takes its compliance obligations “very seriously.”

“Binance is ready to assist regulators from around the world and together find the optimal way to set a fair playing field,” the spokesperson said, adding that, “consumer protection is important to all of us.”

View this post here {link}