Malaysia disclosed order for Huobi to halt local exchange operations

Malaysia’s Securities Commission disclosed on May 22, 2023 that it had reprimanded Huobi Global Limited and Leon Li, whom the regulator identified as the exchange’s chief executive, over an unregistered digital-asset exchange operation. The regulator also said Huobi had been ordered to stop operating in Malaysia, disable its website and mobile applications in the country, and stop advertising to Malaysian investors.

The announcement converted a licensing breach into an access-and-distribution action. It was not merely a warning-list entry: the directives reached the exchange’s website, its applications on Apple’s App Store and Google Play, other digital application platforms, and promotional messages sent by email or social media.

The order behind the announcement

The Securities Commission’s May 22 media release said operating a digital asset exchange without registration as a Recognised Market Operator was an offence under Section 7(1) of Malaysia’s Capital Markets and Services Act 2007. It said Leon Li had been specifically directed to ensure that Huobi carried out the measures.

A separate Securities Commission administrative-action register supplies an important chronology correction. That register dates the actions against Huobi Global and Leon Li to April 19, 2023, even though the regulator announced them publicly on May 22, 2023. For this archive, May 22 is therefore the date of the public regulatory disclosure, not the date the underlying directives were imposed.

The register describes the Huobi finding as a breach of Section 354(1)(a) read with Section 7(1) of the act and Order 3(1) of the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019. It records a reprimand and mitigation directives, but no monetary penalty in the Huobi or Leon Li entries.

What Malaysian users were told

The Securities Commission urged Malaysian investors using Huobi Global to cease trading through the platform, withdraw their investments and close their accounts. That language was the regulator’s instruction, not independent evidence that every user could immediately complete a withdrawal or that every relevant app-store and website restriction had already taken effect.

Contemporaneous reports from CoinDesk and Bloomberg on May 22, 2023 independently matched the core elements of the regulator’s release: the registration issue, the direction to stop Malaysian operations, the website-and-app restrictions and the advertising prohibition. CoinDesk reported that Huobi had been contacted for comment. The surviving contemporaneous record reviewed for this reconstruction does not establish a response from the company before that report appeared.

Why it mattered

The action showed how a national regulator could enforce a crypto-market perimeter through distribution controls as well as licensing rules. Disabling local access points and cutting off targeted advertising can constrain an offshore venue’s reach without making a claim about the exchange’s solvency, custody position or operations in every other jurisdiction.

The distinction is important. The Securities Commission’s announcement was a Malaysia-specific enforcement disclosure against an unregistered exchange operation. It was not a worldwide prohibition on Huobi, a finding that customer assets were missing, a court judgment, or a ruling that every asset offered on the platform had the same legal status. No price or trading-volume claim is made here because the cited records do not provide an attributable event-window dataset capable of isolating a market reaction.

Later confirmation

In its annual report for 2023, published after May 22, the Securities Commission identified the Huobi action as a notable example of enforcement against an unregistered digital-asset exchange. That later institutional summary confirms the regulator’s characterization; it does not alter what the May 22 release and the April 19 action entries established.