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Huobi Falls Foul of Malaysian RegulatorMalaysia’s Securities Commission, the regulator responsible for investor protection and market integrity in the South East Asian country, has closed down the Malaysian operations of Seychelles-headquartered global crypto exchange Huobi.Photo by Zukiman Mohamad on PexelsThe regulator announced the shutdown via a press release published to its website on Monday. The Commission outlined that it has taken action against both the exchange, Huobi Global Limited, and its CEO Leon Li. It cites “operating illegally in Malaysia,” given that it was operating as an unregistered digital asset exchange (DAX) as the rationale for the decision.With the enforcement action has come an order to Huobi from the regulator to “cease circulating, publishing or sending any advertisements, whether in email or on social media platforms, to Malaysian investors, and to stop its operations in the country, including to disable its website and mobile application on several platforms such as Apple Store, Google Play and any other digital application platform.”Compliance concernsThe Securities Commission is putting the onus on the Huobi Global CEO to ensure that this order is complied with. The regulator said that it had concerns about the platform’s compliance with local regulatory requirements. It further outlined that it is an offense in Malaysia to operate a DAX without having completed registration with the Commission as a Recognized Market Operator (RMO) under Section 7 (1) of the Capital Markets and Services Act 2007.The Malaysian regulator also took the opportunity to warn citizens that they should only seek to trade on platforms that are registered RMOs and that for right now, those that have funds on the Huobi platform should withdraw their assets and cease trading on the platform.Expected newsHuobi doesn’t seem to have made an official statement relative to the Malaysian Security Commission’s decision via its official media channels. However, it did provide the following response to CoinTelegraph on Monday:“In response to recent reports, we would like to clarify that the situation outlined pertains to the previous Huobi entity and former shareholders. This is not associated with the current Huobi platform, which adheres to strict regulatory compliance globally.”Taking that response at face value, the company doesn’t seem to be particularly bothered about the enforcement action. It seems as if Huobi were already prepared for this eventuality, by starting a new corporate entity from scratch.In August 2022, the Malaysian regulator issued Huobi Global with a lesser enforcement action by adding the company to its investor alert list. It chastised the firm for operating without regulatory approval.Malaysia hasn’t been a hotbed of activity where crypto and digital assets have been concerned and certainly doesn’t compare with Asian centers like Hong Kong and Singapore who are actively chasing crypto business. However, in March of last year, the country’s Deputy Minister of Communications and Multimedia, Zahidi Zainul, said that the Southeast Asian country should recognize crypto assets like Bitcoin as legal tender.In 2021, Malaysia’s central bank joined a Bank of International Settlements (BIS)-led trial to explore the proof of concept of a central bank digital currency (CBDC), in order to enhance technical and policy capabilities should there ever be a need to issue one.

Cebu Meeting of FSB Highlights Crypto RisksThe Regional Consultative Group for Asia of the Financial Stability Board (FSB) has highlighted the risks implicated by crypto assets in a series of meetings held on Thursday and Friday in Cebu, the Philippines.The FSB is an international body with a mandate to monitor the global financial system, as well as make recommendations in respect of that system. The agency was established by the G20 group of countries in April 2009, replacing its forerunner, the Financial Stability Forum.Photo by John Alvin Merin on UnsplashA regulatory framework for cryptoThe two-day event focused on non-bank financial intermediation (NBFI) in Asia and the development of an effective global regulatory framework for crypto-assets. It discussed recent developments in financial markets, together with their regional impact.In opening remarks, Philippine Central Bank Governor, Felipe Medalla, stated: “Crypto, the biggest issue there is, whether we like it or not is quite a lot, especially younger people who are actually gambling. They have huge losses, our view right now. Well, you’re there, it’s your problem and the regulation becomes strict the moment crypto meets banking.”International participants highlighted the need for the development of an effective global regulatory framework for crypto-assets. Particular concern exists with regard to the potential for systemic risk in relation to crypto and a potential overflow into the traditional financial system.Earlier this year, the FSB proposed a complete regulatory framework for cryptocurrencies, with the report having been originally submitted in October of last year. Among its key components is the imposition of tighter controls. It proposed the guiding principle of “same activity, same risk, same regulation” for crypto assets, mirroring the approach taken for traditional financial assets.Global approach to taming cryptoThis approach has proven to be problematic for people working within the digital assets space. Many of the core facets of cryptocurrencies are entirely different to anything we see in traditional finance. Trying to frame crypto within an existing approach and standard has been perceived by many to be akin to trying to fit a square peg in a round hole.It’s not the FSB's role or place to affect policy directly. That responsibility lies with policymakers and regulators in each individual country. However, the organization is seeking to influence those individuals and entities in the hope that they will employ its suggested regulatory framework.Klaas Knot, Chair of the FSB and President of the Dutch Central Bank, provided this view on crypto: “We will come up with a global regulatory framework. It also only makes sense to regulate this from a global perspective. Because, nowadays you can take a server and put it anywhere in the world and start issuing these digital assets.”From Knot’s take, it’s clear that governments and central bankers are cottoning on to the fact that individual nation-state regulation is futile to an extent where decentralized innovations like cryptocurrency are concerned. Others such as European Central Bank (ECB) President Christine Lagarde and Mark Branson, President of German financial markets regulator BaFin, similarly have called for a globally enforced regulatory approach over the course of the past year.Ongoing struggleWhile regulation can be helpful, particularly when it comes to the points at which crypto meets the traditional system, there’s no doubt that this emerging innovation will disrupt the conventional system to some degree or other. That may place an incentive before central bankers and governments to try and stymie the further development of digital assets.While a truly global approach to regulating digital assets could retard development of the sector, there is rarely total consensus among world governments on a single issue. Therefore, by its very nature, crypto, and the digital assets sector will likely continue to develop regardless. It’s more a question of how long that process takes.

GDAC joins hands with Zodia Markets to cultivate global digital asset networkGDAC, a cryptocurrency exchange run by Korean blockchain-based fintech company Peertec, has signed a business deal with Zodia Markets, a European digital asset marketplace under the UK’s Standard Chartered Group. As key institution-first digital asset platforms in their respective regional markets, the two enterprises plan to work together to build a global digital asset and stablecoin network to drive innovation, with a focus on preventing money laundering and reducing financial costs.Photo by m. on UnsplashAbout Zodia Markets and GDACThe Standard Chartered Group established Zodia Markets in 2021 following approval from the UK’s Financial Conduct Authority (FCA). The group’s latest partnership with GDAC represents a step further into the Korean market, in which it is already a major player through its local branch, the Korea Standard Chartered Bank.GDAC has been making strides in cybersecurity by forging partnerships. The exchange teamed up with Genians, a cybersecurity firm listed on the KOSDAQ stock exchange, and attracted investments from it to accelerate the establishment of a global security network. In October, GDAC entered into a collaborative agreement with crypto wallet provider Bitgo, aiming to enhance the security of the exchange’s wallet services.The exchange serves not only profit-oriented corporations but also non-profit organizations, such as the Community Chest of Korea. It also runs the GDAC Fund Service, a digital asset management solution for corporate clients that it jointly founded with Woori Financial Group.Dedication to different client demographics“Through our partnership with Zodia Markets, a subsidiary of the UK’s Standard Chartered Bank, we look forward to providing even higher-value digital financial services to our corporate clients,” said Lee You-ree, CCO of GDAC. “We also plan to continuously launch helpful, high-liquidity digital financial services for individual customers as well through our work with a European digital financial platform.”