In a significant move aimed at tightening regulatory oversight in the cryptocurrency sector, Malaysia’s Securities Commission (SC) has officially ordered the cryptocurrency exchange Bybit to halt its operations within the country. The SC took this action following allegations that Bybit was operating as an unregistered digital asset exchange (DAX). As confirmed on December 27, Bybit has complied with the commission’s directives.
Following an announcement on December 11, the SC mandated Bybit to disable all its platforms, including its website and mobile apps, within 14 business days. This regulatory action also included directives to cease all advertising targeted at Malaysian investors and the termination of Bybit’s Telegram support group dedicated to Malaysian users.
The SC’s order was specifically directed at Bybit CEO Ben Zhou, highlighting the importance of regulatory compliance. The urgent need for action stems from increasing concerns regarding the exchange’s adherence to Malaysian securities laws. The SC stated, “The SC views this breach seriously, as operating a DAX without obtaining the SC’s registration as a Recognised Market Operator (RMO) is an offense under Section 7(1) of the Capital Markets and Services Act 2007.”
Investors have been urged to engage only with registered and licensed operators, as these platforms undergo rigorous vetting processes and must comply with established guidelines designed to protect investors. The SC has reiterated that investments in unlicensed platforms pose significant risks, including exposure to money laundering and fraud. This caution comes on the heels of heightened regulatory scrutiny in the region as authorities aim to safeguard market integrity.
Malaysia’s regulatory environment for cryptocurrency has become increasingly stringent, with several actions taken against unregulated entities throughout 2024. A recent operation known as “Ops Token” led to law enforcement actions against companies failing to report their crypto trading activities. Moreover, on December 23, the SC added the Web3 wallet service Atomic Wallet to its list of forbidden financial operations in Malaysia, following a similar pattern of non-compliance.
This crackdown on Bybit and similar platforms highlights the ongoing challenges posed by cryptocurrency regulations, affecting both businesses and investors alike. As the cryptocurrency landscape evolves, ensuring compliance with local laws will be crucial for exchange operators and their clientele. The SC continues to monitor and enforce compliance to secure the financial interests of Malaysian investors nationwide.
