Binance faces enforcement action in Malaysia
Malaysia’s Securities Commission today announced enforcement actions against Binance for illegally operating a Digital Asset Exchange (DAX).
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 (RMO) by the SC. 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.
In this regard, the public reprimand was issued against Binance Holdings Limited (Registered in the Cayman Islands), its CEO Zhao Changpeng, as well as three other Binance entities, namely Binance Digital Limited, Binance UAB, and Binance Asia Services Pte Ltd.
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 CEO of Binance Holdings Limited, has also been specifically ordered to ensure that the above directives are carried out.
Investors are advised to stop dealing with and investing through illegal DAX. Those who currently have accounts with Binance are strongly urged to immediately cease trading through its platforms and to withdraw all their investments immediately.
Let’s recall that, in June 2021, the UK Financial Conduct Authority (FCA) announced the imposition of requirements on Binance Markets Limited. The entity is not currently permitted to undertake any regulated activities without the prior written consent of the FCA.
Italy’s Companies and Exchange Commission (CONSOB) and Hong Kong’s Securities and Futures Commission (SFC) have added their voice to the chorus of warnings regarding Binance.