KUALA LUMPUR (March 2): Homegrown fintech group MX Global Sdn Bhd has secured capital injections from cryptocurrency exchange Binance and digital business solutions provider Cuscapi Bhd.

In a statement, MX Global said Binance has made an equity investment in the group, while Cuscapi has subscribed for redeemable convertible preference shares (RCPS) issued by the group.

It said the capital injections will allow MX Global to build brand awareness, hire more high-quality talent and develop new features within Malaysia’s regulatory framework.

MX Global is one of the four recognised market operator-digital asset exchanges (RMO-DAX) in Malaysia, after obtaining full approval from the Securities Commission Malaysia (SC) in July last year. 

MX Global chief executive officer (CEO) Datuk Fadzli Shah said in the statement that the fintech group aspires to be the preferred liquidity platform for digital asset or cryptocurrency investors and token issuers locally and internationally.

Binance’s founder and CEO, Changpeng Zhao, said the group sees the 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,” Zhao added.

Cuscapi executive chairman Datuk Datuk Jayakumar Panneer Selvam described the collaboration between digital assets and payment systems as “historic”.

It will create integration and synergy that will bring together the high potential of the use of cryptocurrency to conduct commerce, while noting that the potential for blockchain and smart contracts’ proliferation in our lives will be massive, he said.

MX Global did not disclose the amount of Binance’s equity investment into the group. Cuscapi, meanwhile, said in a bourse filing that it has invested RM9 million
into MX Global by subscribing to nine million RCPS at RM1 per share.

This comes after The Edge, citing sources, reported on Feb 28 that Binance was on the cusp of acquiring a minority stake in MX Global, pending the SC’s approval, despite getting the nod from the Companies Commission of Malaysia (CCM).

In an email response on the matter on Feb 25, the SC said: “The SC does not confirm or comment on applications made to the SC”.

Binance had been the subject of regulatory crackdown by the SC in August last year, which resulted in an enforcement action taken against the world’s largest cryptocurrency exchange, which had since been banned from operating on all of its platforms, from its website to mobile applications including messaging app Telegram.

The SC has also gone a step further by ordering Binance’s CEO Zhao to ensure the regulator’s directives were carried out.

Asked whether MX Global has obtained the necessary clearance from the SC for the Binance investment, CEO Fadzli said in a statement to 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”.

“We will submit the necessary [documents] and take the necessary actions to ensure that the partnerships always remain compliant with the regulator,” he added.

Fadzli declined to give details on the amount invested by Binance in MX Global.

Fadzli said MX Global plans to introduce more digital assets as part of its product offerings in the near future.

He cited a survey by personal finance comparison website Finder.com which showed Malaysians not only own the five SC-authorised crypto tokens — Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Litecoin (LTC) and Bitcoin Cash (BCH) — but also four other popular tokens — Solana (SOL), Dogecoin (DOGE), Binance Coin (BNB) and Cardano (ADA).  

Besides introducing more tokens, Fadzli said providing utility, in the form of introducing trading pairs between digital assets instead of only ringgit fiat currency, to the crypto tokens remains one of the focus areas of the fintech group.

“We are working very closely with regulators like the SC and Bank Negara Malaysia, and we are confident that we will find a way to execute the proposed offerings
by addressing the concerns and risk points of the regulators.

“Beyond more coins, bridging coins directly together, like a digital asset to digital asset pair, is very important. If you are able to have more coins, then you can do more than just buying and selling them; there are a ton of things that we can do on platform and by integrating other platforms,” Fadzli said.

On the outlook for cryptocurrencies in the domestic market, Fadzli said the market is large enough to support four licenced RMO-DAX, adding that there is still a lot more to be done in the nascent digital assets regulatory framework, which has already proven to be a good example for other markets.

“Cryptocurrency is like the internet in the 90s all over again, except this time, we do not have a clear leader in the space and this is only the beginning of something that could change the world,” said Fadzli.