Securities Commission of Malaysia has initiated stringent measures against Binance Malaysia on the basis of the allegation that the firm has been operating within the Malaysian market illegally. Binance’s Malaysian customers have been warned that they should cease all of their trading activities through Binance’s account and pull out their investment from the firm ASAP.
Securities Commission of Malaysia (SCM) had earlier sent a warning notice to Binance Malaysia over-regulation concerns. SCM alleged that rules and regulations are meant to ensure the integrity of the state’s institutions and nobody is above the law. SCM raised an allegation against Binance Malaysia in which the regulator noticed that the firm was carrying out business activities illegally. However, the illegality was not in respect of anything which was illegal and Binance Malaysia was offering its trade at this trading platform. In fact, what SCM meant by “illegality” was that Binance Malaysia was a non-licensed company. Therefore, carrying out the crypto trade business by Binance was not an authorized business activity approved and/or authorized by SCM.
On the basis, and in the absence of any responsible reply by Binance, SCM was forced to take stringent action against Binance. SCM suggested that under the prevailing laws of the country, Binance was supposed to be registered with the country’s regulator of securities i.e. SCM. The authority described that Binance is not a Recognized Market Operator (RMO) since it hasn’t obtained a mandatory license from SCM.
Since Binance has been labeled as an “illegal business”, therefore, Binance has been served with a public reprimand. Similar copies of reprimand notices were also issued to executives of Binance Malaysia as well as to the global CEO of Binance, Chengpeng Zhao.
SCM apprised that Binance Malaysia was being warned as far back as July 2020. However, at that time too, the firm did not respond positively nor did the firm obtained the required license. For the time being, there are four known affiliates or subsidiary companies of Binance carrying out trading services in Malaysia. These companies include Cayman Island registered Binance Holdings, Singapore-registered Binance Asia Services, UK’s Binance Digital, and Lithuania’s Binance UAB.
SCM has strictly asked Binance to ensure removing of the respective websites/web pages belonging to these four companies. In addition, the firm has been asked to immediately disable the mob app which was facilitating Malaysian crypto investors. However, for ensuring compliance with the directions, Binance has been given a cushion period of 14 days. During this time, the firm will need to immediately suspend all its crypto-related services in the country.
Meanwhile, Binance has been advised by SCM to immediately inform their customers to refrain from participating in any crypto trading through Binance. Similarly, customers have been further advised to withdraw their funds lying in their trade account ASAP.