The Securities Commission Malaysia ("SC") announced on 30 July 2021 that it has initiated enforcement actions against Binance, one of the largest cryptocurrency exchange operators in the world, for illegally operating a Digital Asset Exchange ("DAX") in Malaysia. Under Sections 7(1) and 34(1) of the Capital Markets and Services Act 2007, all DAX operators must be registered as Recognized Market Operators by the SC. The SC's media release can be accessed here.
The SC said it 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. In this regard, the public reprimand was issued against Binance Holdings Limited, its Chief Executive Officer Zhao Changpeng, and three other Binance entities, namely Binance Digital Limited (registered in the UK), Binance UAB (registered in Lithuania) and Binance Asia Services Pte Ltd (registered in Singapore).
All four Binance entities have been ordered by the SC to:
- disable the Binance website (www.binance.com) and mobile applications in Malaysia within 14 business days from 26 July 2021;
- 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; and
- immediately restrict Malaysian investors from accessing Binance's Telegram group.
Zhao, as the Chief Executive Officer of Binance Holdings Limited, has also been ordered to ensure that the above directives are carried out by the four Binance entities.
According to list of registered digital asset exchanges published by the SC (updated as of 5 May 2021), the SC has only registered three Recognized Market Operators to establish and operate digital asset exchanges in Malaysia, namely Luno Malaysia Sdn Bhd, SINEGY Technologies (M) Sdn Bhd and Tokenize Technology (M) Sdn Bhd.
Originally Published 02 August 2021
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