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Malaysia bans Binance, shut operations in 14 days

Binance has been served with a notice to stop offering its services in the country.

Malaysian Securities Commission (SC) on Friday has directed the exchange to shut operations in the country.

The agency announced enforcement actions against it for illegally operating a Digital Asset Exchange (DAX).

In July 2020, Binance was issued a public reprimand for continuing to operate illegally in Malaysia despite being included in the SC’s Investor Alert List.

The list contains unauthorized websites, investment products, companies, and individuals or any entity not licensed to operate in Malaysia.

Yesterday, SC issued a public reprimand against Binance Holdings Limited (Registered in the Cayman Islands), its CEO Zhao Changpeng, as well as three other related entities, namely Binance Digital Limited (Registered in the UK), Binance UAB (Registered in Lithuania), and Binance Asia Services Pte Ltd (Registered in Singapore).

SC’s directions to Binance

All four Binance entities have been ordered by the SC 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 Binance’s Telegram group.

Zhao has also been specifically ordered to ensure that the above directives are carried out.

SC’s directions to citizens

SC has issued an advisory against dealing with and investing through the illegal DAX. Users with active accounts have been urged to immediately stop using its platforms and withdraw all their investments.

Moreover, citizens have been encouraged to notify the SC if they come across any “suspicious websites or receive any unsolicited phone calls or e-mails offering investment advice.”

Recently, Binance has been subjected to arm-twisting by regulators in several countries. Yesterday was also a tumultuous day as it announced the exit of its futures and derivatives products offerings from Europe, beginning from Germany, the Netherlands, and Italy.

The same day its officials were summoned by India’s anti-money laundering agency for being involved in a betting scam.

Regulatory authorities are tightening their grip on crypto exchanges to ensure compliance with the local laws. Cryptocurrencies have created a free flow of money analogous to the flow of information witnessed during the ‘globalization wave’ in the last two decades of the 20th century which led to the creation of new policies like ‘Special Economic Zones’. Regulators may bring similar policy initiatives to create a regulated market.

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