Malaysia’s Enforcement Action Against Bybit

Malaysia’s Securities Commission (SC) has initiated enforcement actions against the Bybit crypto exchange and its CEO, Ben Zhou, for operating a crypto asset trading platform without proper registration.

On Friday, the regulator announced that Bybit must suspend its website, mobile applications, and any digital platforms in Malaysia. The company has been given a deadline of 14 business days starting December 11 to comply.

Additionally, Bybit has been ordered to cease all advertising activities targeting Malaysian investors and to discontinue its Telegram support group for local users.

The decision was made due to concerns regarding Bybit’s compliance with local regulations and the need to protect investors’ interests. Operating a Digital Asset Exchange (DAX) without the SC’s registration as a Recognised Market Operator (RMO) is against Section 7(1) of the Capital Markets and Services Act 2007.

Bybit and Zhou have been listed on the regulator’s Investor Alert List since July 2021 for similar regulatory issues.

The Securities Commission noted that Bybit has complied with the enforcement actions. They warned investors that trading on unregistered platforms exposes them to increased risks of financial crimes, highlighting that only six crypto asset exchanges are officially registered in Malaysia.

In a response posted on Bybit’s Malaysia Telegram channel, the company acknowledged the inconvenience and expressed hope to reconnect with users once it secures the necessary licenses.

Bybit has not yet responded to inquiries regarding its future plans in Malaysia. Additionally, the exchange exited France in August due to stricter licensing requirements in anticipation of the European Union’s Markets in Crypto-Assets (MiCA).