The Malaysian Securities Commission (SC) has ordered crypto exchange Bybit and its CEO Ben Zhou to halt all operations in the country.
In a recent press statement, the financial regulator explained that the order stems from Bybit’s inability to obtain authorization to operate as a digital asset exchange (DAX) under local regulations.
Regular performance
The SC expressed concern over Bybit’s non-compliance with local laws and emphasized the importance of protecting investors.
Under Malaysia’s Capital Markets and Services Act 2007, operating a DAX without approval as a Recognized Market Operator (RMO) is illegal. The SC emphasized the seriousness of this breach and its potential risks to the public.
Following this action, Malaysian authorities have ordered Bybit to disable its website and mobile applications by December 25. The regulator has also demanded the cessation of promotional efforts targeting Malaysian investors and the immediate termination of the platform’s Telegram support group for users in the region.
According to the SC, this decision came three years after Bybit and Zhou were placed on the Investor Alert List in July 2021. This list highlights unregistered entities and individuals that Malaysian investors are advised to avoid.
The regulator’s Investor Alert List also includes other prominent platforms, such as Bitget and Atomic Wallet, that operate without registration.
Taking this into consideration, the SC has urged investors to deal only with approved RMOs, which are rigorously monitored to meet regulatory and operational standards.
Although cryptocurrencies are legal in Malaysia, they are not classified as legal tender. The SC oversees regulations and imposes strict compliance requirements on operators. According to the SC’s data, only six exchanges are licensed to operate within Malaysia.
Bybit’s compliance efforts
Social media posts revealed that Bybit had blocked login access for Malaysian users since December 24, citing regulatory compliance efforts. The exchange announced plans to re-enter the market once it has obtained the necessary licenses.
Meanwhile, Bybit’s regulatory challenges extend beyond Malaysia. The exchange recently announced plans to suspend recording and custody services for French users starting January 8, 2025, due to increased scrutiny from French authorities.
Launched in 2017, Bybit is one of the largest crypto exchanges in the world, managing more than $16 billion in assets. according to CoinMarketCap data.