The tech mogul backing Binance’s Malaysia breakthrough

Binance, one of the world’s largest crypto exchanges, is finally in Malaysia after a rough 2021 trying to break into the country’s growing cryptocurrency market.

In July last year, the Securities Commission Malaysia (SC) issued a cease and desist against Binance and its founder Changpeng Zhao for operating without a license, effectively barring the company from directly setting up shop in the country.

After the ban was issued, Tech in Asia understands that a suitor, Penang-based Sinegy, tried to strike a collaboration with Binance but that didn’t materialize. Sinegy is an SC-recognized digital asset exchange (DAX) operator, having been registered with the regulator since June 2019.

Binance told Tech in Asia that it does not comment on rumors or speculation. Sinegy didn’t respond to requests for comment.

Binance may be finally getting what it wants. On March 1, another SC-recognized Malaysian DAX operator, MX Global, announced that the global crypto exchange has taken up a strategic stake in the company.

MX Global also revealed that Cuscapi, a Bursa Malaysia-listed tech company, is investing 9 million ringgit (US$2.13 million) in the firm in exchange for preference shares.

In a bourse filing on March 1, Cuscapi estimated that, upon conversion of the shares, it may have “an equity stake between 25% and 35%” in MX Global. The DAX, however, did not disclose the amount of Binance’s equity investment.

MX Global’s representatives “came thoroughly prepared when probed by the regulator about the Binance investment,” a source with knowledge of the matter tells Tech in Asia.

“Some of the SC officers had reservations, going by the regulator’s actions against Binance last year, but when they queried the MX Global team, the company’s representatives were able to furnish relevant information,” the source explains.

The source didn’t divulge the details of the negotiations between the SC and MX Global or the investment terms. But he adds that what likely gave MX Global the edge over Sinegy is that the former comprises “industry veterans with experience in navigating the local regulatory landscape.”

All roads lead to Wong

According to filings with the Companies Commission of Malaysia, MX Global was founded on March 7, 2018. Its directors are Fadzli Shah Anuar – who serves as the company’s CEO – as well as Yap Shon Leong, Mat Noor Nawi, Zuraida Elma Zulkefli, and Jason Chan Ling Khee.

Most of these names are associated with two large-cap tech companies listed on Bursa Malaysia – MyEG Services and Excel Force – and their founder Wong Thean Soon.

Wong’s close associates

Hedging their bets

What MX Global gains from Binance