Bybit Crypto Exchange Enforcement Action in Malaysia

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

On Friday, the regulator mandated Bybit to suspend its website, mobile applications, and any other digital platforms in Malaysia, giving the company 14 business days starting from December 11 to comply.

Additionally, Bybit must cease all advertising to Malaysian investors and shut down its Telegram support group for Malaysians.

The SC stated, "This decision comes after concerns about the platform’s compliance with local regulatory requirements and protecting investors’ interests." Operating a Digital Asset Exchange (DAX) without SC registration as a Recognised Market Operator (RMO) violates Section 7(1) of the Capital Markets and Services Act 2007.

Bybit and Zhou have been on the regulator’s Investor Alert List since July 2021 due to the same violations. The SC also reminded investors that trading crypto on unregistered platforms lacks protection under Malaysian securities laws, increasing the risk of financial crimes. Currently, only six crypto asset exchanges are registered to operate in Malaysia.

Bybit commented on its Telegram channel, "We understand that this may cause some inconvenience. Once we have secured the appropriate licenses, we look forward to reconnecting with you again in the future."

The company did not provide immediate comments regarding its future in the Southeast Asian market. In a related note, Bybit exited France in August as the country tightened the licensing process for crypto companies in light of the EU’s Markets in Crypto-Assets (MiCA) regulations.