Malaysia Takes Enforcement Actions Against Binance, Advises Investors to 'Withdraw All Their Investments Immediately'

The securities regulator of Malaysia has taken enforcement actions against the global cryptocurrency exchange Binance. Noting that the exchange is operating illegally in the country, the regulator has advised those who currently have accounts with Binance “to immediately cease trading through its platforms and to withdraw all their investments immediately.”

Malaysia Issues Public Reprimand Against Binance

  • The Securities Commission Malaysia (SC) announced Friday “enforcement actions against Binance for illegally operating a digital asset exchange (DAX).”
  • Under Malaysia’s regulation, digital asset exchange operators must be registered with the Securities Commission as Recognized Market Operators (RMO).
  • Since the global crypto exchange is operating in Malaysia without being registered, the Malaysian securities watchdog “has issued a public reprimand” against four Binance entities and the company’s CEO, Changpeng Zhao (CZ), for continuing to operate illegally in Malaysia. According to the SC, Binance continued to operate in the country despite being included in the regulator’s Investor Alert List in July 2020.
  • The four entities are Binance Holdings Ltd. (registered in the Cayman Islands), Binance Digital Ltd. (registered in the U.K.), Binance UAB (registered in Lithuania) and Binance Asia Services Pte Ltd. (registered in Singapore).
  • All four Binance entities have been ordered by the securities regulator to “disable the Binance website (www.binance.com) and mobile applications in Malaysia within 14 business days from 26 July 2021.”
  • They must also “immediately cease all media and marketing activities, including circulating, publishing or sending any advertisements and/or other marketing material, whether via emails or otherwise, to Malaysian investors.” Furthermore, they must “immediately restrict Malaysian investors from accessing Binance’s Telegram group.”
  • The regulator also specifically ordered Zhao “to ensure that the above directives are carried out.”
  • Emphasizing that investors should stop dealing with and investing through illegal digital asset exchanges, the Securities Commission advised those who currently have accounts with Binance “to immediately cease trading through its platforms and to withdraw all their investments immediately.”
  • A growing number of regulators worldwide have warned Binance about operating in their jurisdictions without being authorized. They include regulators in Japan, the U.K., Cayman Islands, Hong Kong, Thailand, Germany, and Lithuania.
  • Commenting on the mounting regulatory scrutiny against his exchange, Zhao said, “We want to be licensed everywhere … From now on, we’re going to be a financial institution.” He also revealed that the company is looking for “a strong compliance background CEO to show our commitment to compliance as this is the top priority of the organization.”
  • Earlier this week, Binance announced that “Binance Margin will delist AUD, EUR and GBP cross and isolated margin pairs.” The exchange also announced that it will stop offering futures and derivatives products in Europe.

What do you think about Binance’s troubles with regulators worldwide? Let us know in the comments section below.

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