Malaysia Declares Midtou and Actionnode as Unregulated

Malaysia’s financial watchdog, Securities Commission Malaysia (SC) has issued warnings against two more unregulated operators. Midtou Financials and Actionnode are forex and cryptocurrency websites respectively that the SC has declared as illegally operating in Malaysia.

The SC Malaysia said that Midtou Financials, a forex trading subsidiary of Indonesia’s Midtou Global Financial Group is unlicensed in Malaysia. Midtou Financials is also associated with Midtou Global and Midtou Financial Global.  Both brands faced accusations of offering unregulated capital market services by the SC.

In Indonesia, Midtou Global Financial received regulations and licensing from the Indonesia Commodity Futures Trading Regulatory. Also, abbreviated as (BAPPEBTI). However authorization by the BAPPEBTI does not warrant an operating green light in Malaysia.

Similarly, the Securities Commission blacklisted Actionnode, a cryptocurrency services provider, for operating without a license in the country. The company is now on the SC’s caution list of illegally operating cryptocurrency websites.

Securities Commission Blacklists Binance and FintechFX

In related SC Malaysia news, Binance, the world’s largest cryptocurrency exchange by liquidity faces blacklisting. The SC said in July that Binance, FintechFX and a few other crypto companies were offering unregulated investments services. They practice no authorization nor subject to any regulatory oversight in the country.

Financial regulatory watchdogs in various countries have had to blacklist, issue warnings or force crypto firms to shut down operations. This is due to the lack of standard or encompassing crypto regulatory frameworks which leave room for regulatory loopholes.  Unlicensed websites may tend to manipulate the loopholes and operate in regulatory gray areas.

According to SC Malaysia, firms engaging in regulated activities without registration or a proper license are subject to the law. In fact, the Capital Markets and Services Act 2007 enforces regulation and controls licensing and adherence in the Malaysian financial markets. Thus, offenders found to be in contempt of the law are subject to a fine and a 10-year imprisonment.

SC Malaysia Includes Offshore Firms in its Red-Flag List

Additionally, SC Malaysia’s list of unregulated financial services firms includes offshore firms offering Fintech and payment services.  As the era of digital banking approaches, the country is bracing itself with up to five licenses for the financial industry.

Currently, the Central Bank of Malaysia, Bank Negara Malaysia (BNM) is working towards improving and updating its regulatory frameworks. This includes guidelines for virtual banking, dubbed the “Exposure Draft on Licensing Framework for Digital Banks.”