Binance is acquiring a stake in MX Global Sdn Bhd, a licensed cryptocurrency platform in Malaysia, a few months after the world’s largest cryptocurrency exchange left the country over its regulatory licence limbo.
In a statement, Binance said it has made an undisclosed equity investment in MX Global to help it build brand awareness, hire more talents, and introduce new products within Malaysia’s regulatory framework. Part of the deal, digital business solutions provider Cuscapi Bhd Cuscapi has subscribed for redeemable convertible preference shares (RCPS) issued by MX Global.
While Binance did not disclose the amount of its equity investment into MX Global, Cuscapi revealed in a bourse filing that it has invested more than $2.1 million.
The acquisition could help with Binance’s regulatory hurdles, as MX Global was recently granted the status of a recognised market operator-digital asset exchange (RMO-DAX). Back in July 2021, the startup obtained full approval from the Securities Commission Malaysia (SC).
Changpeng Zhao (CZ), Founder and CEO of Binance, said, “We see potential in Malaysia given its respected and innovative crypto and blockchain community. We believe that partnering with MX Global will be a springboard to new opportunities, both in Malaysia and the region as a whole as well as across the entire crypto and blockchain ecosystem.”
Malaysia slaps CZ with regulatory order
CEO of MX Global, Dato’ Fadzli Shah added: “MX Global aspires to be the preferred liquidity platform for digital asset or cryptocurrency investors and token issuers locally and internationally. The cooperation of Binance will not only support us in achieving this goal but should also provide the most capital-efficient opportunity for us to align and compete with other global players in the industry. We will continue building a safe, easy and real digital asset ecosystem for our customers.”
Binance had been slapped last year with an enforcement action by Malaysia’s Securities Commission Malaysia (SC) and was ordered to stop operating in the country. The watchdog also noted that Binance’s P2P platform allows users to buy cryptocurrencies using Malaysian ringgit though it lacks the license to operate a fiat-to-crypto gateway.
The legal notice specifically named Binance’s brands registered in the Cayman Islands, Lithuania, the UK, and Singapore. The exchange CEO Zhao Changpeng (CZ) was also mentioned by name to ensure that the SC’s directives are carried out.
Anyone who engages in regulated activities without a valid license or registration from the SC is committing an offence under the Capital Markets and Services Act 2007. If convicted, they may be punished with imprisonment of up to ten years and fined.