Bybit Faces Ban in Malaysia

Malaysia’s Securities Commission (SC) has taken enforcement action against Bybit, a global cryptocurrency exchange, and its CEO Ben Zhou, for operating without proper registration.

The SC announced on Friday that Bybit must suspend its website, mobile apps, and digital platforms in Malaysia within 14 business days starting December 11. Additionally, the exchange has been ordered to:

• Cease advertising activities targeting Malaysian investors.
• Shut down its Telegram support group for Malaysian users.

Regulatory Concerns

Bybit’s operation of a Digital Asset Exchange (DAX) without registering as a Recognised Market Operator (RMO) is a violation of Malaysia’s Capital Markets and Services Act 2007.

“This decision reflects concerns about compliance with local regulations and investor protection,” the SC stated.

Bybit and Zhou have been listed on the Investor Alert List since July 2021 for the same offense.

Compliance and Investor Risks

Bybit has complied with the SC’s directives, including the suspension of its platforms. The SC reminded investors that:

• Unregistered Platforms: Those trading on such platforms are not protected under Malaysian securities laws.
• Increased Risks: Unregistered platforms expose users to potential financial crimes.

Currently, Malaysia has six registered crypto exchanges authorized to operate legally.

Bybit’s Response

Bybit addressed the situation via its Malaysian Telegram channel, acknowledging the inconvenience caused to users:

“Once we have secured the appropriate licenses, we look forward to reconnecting with you again in the future.”

Bybit has not yet disclosed its future plans for the Malaysian market but faces broader regulatory challenges in other regions.

Broader Regulatory Challenges

This isn’t the first time Bybit has faced regulatory hurdles:

• France Exit: Bybit ceased operations in France in August 2024 due to stricter licensing requirements ahead of the European Union’s Markets in Crypto-Assets (MiCA) regulations.

These incidents highlight the increasing scrutiny faced by cryptocurrency exchanges as governments tighten regulatory oversight worldwide.

Bybit’s suspension in Malaysia underscores the importance of compliance with local regulations. As authorities aim to protect investors, crypto exchanges must navigate complex regulatory landscapes to maintain operations in diverse markets.