Malaysian SC Orders Enforcement Action Against Binance For Illegal Operations

The Securities Commission Malaysia (SC) ordered enforcement actions against Binance for illegally operating a Digital Asset Exchange (DAX) without obtaining the necessary approval from the SC. A public reprimand was also issued against the exchange for carrying out operations despite being put on the SC‘s ’Investor alert list in July 2020.

The regulatory head of Malaysia has asked Binance to：

（1）disable the Binance website (www.binance.com) and mobile applications in Malaysia within 14 business days from 26 July 2021;

（2）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

（3）immediately restrict Malaysian investors from accessing Binances Telegram group

The regulatory body asked investors to be wary of illegal DAX and report any suspicious activity or phone calls for investment advice in cryptocurrencies. The official statement from the agency read,

“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.”

Malaysia joins the growing list of regulators to issue regulatory warnings or initiate enforcement actions against the crypto exchange over the past month. Earlier Thai SEC has also initiated criminal proceedings against the exchange for operating without approval. Similarly, regulators from the UK, Japan, Italy, Hong Kong, Cayman Islands, and few others have issued non-compliance warnings as well.

What lies ahead for Binance？

Binance‘s run-in with regulators is nothing new as the crypto exchange has been at the receiving end of regulators from time to time. It managed to expand its business in various countries despite minor hiccups, but now it seems the exchange’s regulatory negligence has started to catch up.

The crypto exchange has taken a series of decisions over the past week to mend its way. It first discontinued the much-hyped stock tokens that drew a lot of flack from German regulators. It also cut down the leverage limit from as high as 125X to 20X along with limiting the Bitcoin withdrawal limit for non-KYC customers.