Malaysia’s Securities Commission (SC) has taken enforcement action against crypto exchange Bybit and its CEO, Ben Zhou. The regulator directed Bybit to halt its operations in the country for failing to register as a Recognised Market Operator (RMO). This includes shutting down its website, mobile applications, and digital platforms within 14 business days from December 11.
Bybit Plans Licensing After Malaysian Suspension
The SC ordered Bybit to suspend all promotional activities targeting Malaysian investors and terminate its local Telegram support group. The regulator emphasized that operating a digital asset exchange (DAX) without proper registration breaches Section 7(1) of the Capital Markets and Services Act 2007. Bybit has been on the SC’s Investor Alert List since July 2021 for similar violations.
Bybit complied with the directive and ceased its services as instructed. The SC warned that trading on unregistered platforms exposes investors to higher fraud risks and unprotected transactions. Currently, six registered crypto-asset exchanges are authorized to operate in Malaysia.
Bybit acknowledged the enforcement action and expressed plans to seek the required licenses to resume operations in the future. The exchange recently exited France due to stricter licensing requirements ahead of the European Union’s Markets in Crypto-Assets (MiCA) framework. Bybit did not immediately clarify its strategy for re-entering Malaysia or other regulated markets.
Investor Protection Drives Malaysia’s Crypto Crackdown
The SC’s actions underscore the importance of compliance with local regulations to protect investors’ interests. The regulator reiterated that Malaysian securities laws do not safeguard trading on unauthorized platforms. These measures aim to strengthen oversight in Malaysia’s growing cryptocurrency sector.
Bybit’s suspension highlights Malaysia’s firm stance on enforcing compliance in its cryptocurrency market. The SC prioritizes investor protection by holding platforms accountable for regulatory breaches. The decision reflects the challenges crypto exchanges face in navigating global regulatory frameworks.