As global repression escalates, Malaysia targets Binance CEO

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Binance Update

After Malaysia condemned CEO Changpeng Zhao’s “illegal” operations and the group also announced plans to close its European derivatives business, on Friday, the global decentralized effort to crack down on cryptocurrency exchange Binance reappeared.

The Malaysian securities regulator said it is launching “enforcement operations” against Binance’s Cayman Islands-registered holding company and its three global subsidiaries.Almost at the same time, Binance announced that it would “reduce” its lucrative Derivatives business In Europe, the company also faces regulatory scrutiny.

Binance has been ordered by Malaysia to ban its main exchange, binance.com and mobile applications in the country within 14 working days from July 26. It must also immediately stop all media and marketing activities for local investors and prevent them from accessing its popular Telegram chat channel.

“It is recommended that investors stop trading and investing [the] Unlawful [digital asset exchange]. Strongly urge those who currently have accounts with Binance to immediately stop trading through its platform and immediately withdraw all investments,” the Securities Commission of Malaysia said. A notice Publish on its website.

Malaysia’s intervention intensified the global regulatory offensive that the UK Financial Conduct Authority began last month Alert Oppose the exchange, claiming that it is not authorized to conduct regulated activities or crypto asset operations in one of the world’s leading financial centers. Other major markets, such as Japan, Hongkong Italy also issued a warning about Binance.

Malaysia’s move is notable because it specifically targeted Zhao, nicknamed “CZ”, a Canadian-Chinese cryptocurrency tycoon whose former Binance employee said its headquarters are in Singapore.

Zhao was “publicly condemned” by the Securities Commission of Malaysia and was “specially ordered” to ensure that his requirements related to the ban on binance.com and related marketing are implemented.

He did not immediately respond to a request for comment. Zhao said at a press conference earlier this week that the exchange is seeking to “very aggressively” strengthen its compliance work, including placing compliance professionals in “very senior” positions.

Regulatory action on Binance and broader concerns about its preventive measures Money laundering And the financing of terrorism on its platform has eroded its connection with the financial system.UK banks Limited customers From the transfer of funds to the exchange through their charge card, at least two payment partners (providing an important link between the cryptocurrency group and the hard currency market) have cut the connection.

Several hedge funds also told the Financial Times They are backing Dealing with exchanges and other activities in response to accelerated crackdowns.

Binance also faces strong opposition from retail traders who say they are losing money on the group’s derivatives exchange, which allows traders to make huge bets with very little upfront funds. Binance said on Friday that it will reduce its European futures and other derivative products starting from Germany, Italy and the Netherlands.

Malaysia stated that despite being included in the investor alert list from July 2020, Binance continued to conduct business in the country and took enforcement actions.

In addition to Binance’s overall holding company, Malaysia’s enforcement actions have also targeted the UK-based Binance Digital; Binance UAB in Lithuania; and Binance Asia Services in Singapore. According to documents seen by the British Financial Times, these three entities are at least partially owned by Zhao.

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