Binance acquires stake in Malaysian fintech company MX Global

CRYPTOCURRENCY exchange Binance has made an equity investment of undisclosed value in Malaysian fintech MX Global, the Kuala Lumpur-based company said in a press release on Mar 1.

This comes after Binance was told in July 2021 to halt its operations in Malaysia as it lacked the necessary licence.

As MX Global is a recognised market operator-digital asset exchange that has been granted full approval by Malaysia's Securities Commission (SC), the acquisition may help Binance's regulatory hurdles.

The company also announced another investment of its redeemable convertible preference shares by digital business solutions provider, Cuscapi Berhad.

Asked whether MX Global has obtained approvals from the SC for the Binance investment, MX Global chief executive officer Fadzli Shah told The Edge on Wednesday (March 2) that the group "has received confirmation that the structure of the investment does not require approval by the SC at this point". He added that "We will submit the necessary [DOCUMENTS]and take the necessary actions to ensure that the partnerships always remain compliant with the regulator."

With Binance and Cuscapi's stake in the company, MX Global said it is able to build brand awareness, hire more high-quality talent and develop new features within Malaysia's regulatory framework.

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MX Global chief executive officer Fadzli believes that Binance will support the company in achieving its goal of being the preferred liquidity platform for digital asset investors and token issuers.

He added that he expects the acquisition to provide a capital-efficient opportunity for MX Global to align and compete with other global players in the industry as well.

Founder and CEO of Binance Changpeng Zhao said he sees 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," he added.

Apart from Malaysia, Binance has also recently entered into agreements with companies in other countries in the region such as Singapore and Thailand.

The cryptocurrency exchange acquired 18 per cent of Singapore-regulated private securities exchange, Hg Exchange (HGX) announced in December 2021. The acquisition followed Binance's exit from Singapore due to its regulatory licence limbo.

To expand its presence in Thailand, Binance has also tied up with Thai billionaire Sarath Ratanavadi's Gulf Energy Development to study a digital asset exchange in the South-east Asian nation. According to a Reuters article, Gulf Energy expects to finalise a joint venture with Binance in the second quarter of 2022 as well.

Prior to this agreement, Thailand's securities and exchange commission had filed a complaint against Binance for operating a digital asset business in the country without a licence.