Malaysia’s Securities Commission Directs Bybit to Cease Operations
Malaysia’s Securities Commission (SC) has directed crypto exchange Bybit and its CEO Ben Zhou to cease all operations within the country. This decision comes after Bybit failed to secure authorization to operate as a digital asset exchange (DAX) under local regulations.
Regulatory Crackdown
- The SC expressed concern over Bybit’s non-compliance with local laws and emphasized the importance of safeguarding investors.
- Operating a DAX without obtaining approval as a Recognized Market Operator (RMO) is illegal under Malaysia’s Capital Markets and Services Act 2007.
- The SC highlighted the seriousness of this breach and its potential risks to the public.
Following the directive, Bybit has been instructed to turn off its website and mobile applications by Dec. 25. The regulator also demanded the cessation of promotional efforts aimed at Malaysian investors and the immediate termination of the platform’s Telegram support group for users in the region.
Bybit and Zhou were placed on the SC’s Investor Alert List in July 2021, three years prior to this recent action. This list warns Malaysian investors about unregistered entities and individuals to avoid.
SC’s Investor Alert List
- The SC’s Investor Alert List also includes platforms like Bitget and Atomic Wallet, which operate without registration.
- Investors are urged to deal only with approved RMOs that meet legal and operational standards.
While cryptocurrencies are legal in Malaysia, they are not considered legal tender. The SC oversees their regulation and imposes strict compliance requirements on operators. Currently, only six exchanges are licensed to operate within Malaysia according to the SC’s records.
Bybit’s Compliance Efforts
- Bybit has blocked login access for Malaysian users since Dec. 24 in efforts to comply with regulations.
- The exchange plans to re-enter the market once it secures the necessary licenses.
- Bybit also faces regulatory challenges in France, where it will suspend withdrawal and custody services for users starting Jan. 8, 2025.
Bybit, launched in 2017, is one of the largest crypto exchanges globally, managing over $16 billion in assets according to CoinMarketCap data.
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Posted In: Exchanges, Regulation
