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- 1 Huobi Global Ltd. loses its market in Malaysia.
- 2 SAC claims to intimate the permissible assets and their trading in the country.
- 3 Houbi being unregistered has to stop its run, says SC.
An official reproof against Houbi Global(HG) Ltd. and Leon Li, the company’s CEO has been issued by the Security Commission of Malaysia (SC). The alleged is accused of illegally operating Digital Assets Exchanges (DAXs) in the Malaysian region. The reports say that after this reprimand of the company, its operations are said to be stopped in Malaysia.
Post this issuance, the company had to discontinue its website’s operations and mobile application on multiple platforms like Google Play, Apple Store, and more. Also, HG Ltd. has been said to end its publishing, circulating, or sending any advertisements to Malaysian investors. It can no longer be done through email or on social media platforms.
SC in Malaysia
Shariah Advisory Council (SAC) of the SC publicly set forth elicits about permissible assets. The digital currencies and digital tokens investments and trade will be done on registered DAXs. The business should satisfy the requisites under the SAC’s resolution. This is the accepted digitization vitality in the capital market and its hiking adoption by the marketers involved. The SAC has sorted digital assets from Shariah’s perspective.
Shariah’s compliance revolves around the following mentioned condition to maintain an updated status in the Malaysian market of cryptocurrencies.
First, the issuance extended from the digital tokens should only be used for Shariah-compliant purposes. Also, the rights and comforts from the tokens must also be Shariah-compliant.
Secondly, the surviving SAC resolution has to be on the stationing of Sukuk. An Islamic bond or “Sharia-compliant” bond seeing an Islamic financial certificate showing a portion of ownership in a portfolio of eligible ongoing or future assets. It’s a proposed Islamic version of standard bonds.
Accompanied will be the business activities canon under the Shariah screening methodology for listed companies. It will apply if the usage of proceeds and privileges digital tokens is for Shariah-compliant and non-Shariah-compliant purposes.
Statistical Syncing
SC reports say amidst October 2019 and December 2020 around 450,000 accounts were opened with these DAXs. This stands well against the respective 159,333 and 423,264 CDS accounts opened with Bursa Malaysia in 2019 and 2020.
Following are the other stats. In 2022, 128,000 digital asset accounts and more were made. The SC’s Digital Assets Guidelines were issued on 28 October, 2020 and made for proper innovation in digital assets. It was expected to be the key to protecting the interests of issuers and investors by managing the risks ahead.
No public can issue, distribute, or offer, digital assets in Malaysia. It is mandatory to register with or obtain authorization from the SC. Permissible digital assets like Bitcoin, Ethereum, Cardano, LiteCoin, Bitcoin Cash, Ripple, Chainlink, Solana, and Uniswap all fall under this category.
SC Vs Houbi
Concerns about the platform’s adherence to local regulatory needs and safeguarding investors’ interests are the apt reasons for this context. The SC sees this as a serious violation. Operating a DAX without getting the SC’s registration as a Recognised Market Operator (RMO) is an offense under Section 7(1) of the Capital Markets and Services Act 2007.
The SC wishes Malaysian investors using HG Ltd. to instantly stop trading through its platform, withdraw all their investments, and close their accounts. Also, the authority advised investors to invest and deal with RMOs only. They claim that RMOs have undergone strict regulatory scrutiny and are required compliance to strict guidelines.
SC feels that by this, the investors can be saved under Malaysia’s securities laws. The ones investing in unlicensed or unregistered entities or individuals are exposed to threats such as fraud. Certainly post that they won’t be a call to be protected under Malaysian securities laws.
SC urges investors to cautiously invest and choose investment platforms. Also, perform activities with due thoroughness before making any kind of investment decisions. Also, investors should be careful, of investment schemes that assure high returns with little risk. These vibrant ponzies may be good looking but to be true, not good for health.
SC claims to protect investors and devotes HG’s ecosystem to Malaysia’s environment. Investors can secure their investments and avoid getting trapped and becoming victims of fraudulent schemes.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
