Once again, the Huobi exchange has found itself under hot waters and this time, it is the regulators in Malaysia that have stepped up against the exchange.
SC of Malaysia adds Huobi to Alert List
The reports have just come in from Malaysia about the Huobi exchange in regards to being added to the investor alert list.
The regulatory authority that has taken action against the Huobi exchange is the Securities Commission (SC) of Malaysia.
A statement was released by the Malaysia SC where it talked about the operations being run by the exchange in the country. The regulatory authority officially announced on Monday that it has added the exchange to the alert list.
Investors in Malaysia can now view the exchange added to the Invest Alert List of the Securities Commission.
Huobi Exchange is Unregistered in Malaysia
The Securities Commission in Malaysia has issued a statement supporting the action taken against the Huobi exchange.
According to the regulators, the exchange has been offering virtual and digital assets/securities to investors in Malaysia without being registered.
The Malaysian regulator’s stance is that the exchange must be registered and have an appropriate license before it can operate in the country.
SC Tweeted about the Action
The Malaysian Securities Commission also made a public announcement through Twitter regarding its action. It announced that in order to operate within the capital market and offer locals financial securities, they must have authorization.
As the exchange does not have proper authorization or registration, it is legally unauthorized to operate in Malaysia.
The SC has also intimated the investors in Malaysia about the same, advising them not to interact with such entities at all. It has asked the investors not to invest in such entities including the Huobi exchange.
High Risk for Investors
The regulator has also intimated to the investors that they are at a high risk of losing their funds and investments if they continue interacting with unregistered entities.
The intimation also advises the investors that they will not be eligible to acquire any compensation in case they end up falling prey to scams.
Simply put, the money or investments lost to unregistered or unlicensed platforms is not recoverable at all. The regulatory authorities have no obligation to pursue any legal claims against entities that are unregistered to operate in the country.
Huobi Exchange is in a Bad Spot
Following the announcement, the exchange has witnessed a great fall in its user base in Malaysia. This is a bad situation for the exchange as it would find it difficult to regain the trust of the investors until it acquires a proper license.