Key Takeaways
- Order is because of Bybit’s failure to secure the license to operate as a digital asset exchange (DAX) in the country
- Exchange is asked to disable its website and mobile applications, shut down Telegram support group for Malaysian users
The Securities Commission (SC) of Malaysia has ordered Bybit, to cease all operations in the country for failing to register as a digital asset exchange (DAX).
As part of the order, Bybit must disable its website, mobile applications, and other platforms accessible within Malaysia. The exchange is also required to terminate all advertisements targeted at Malaysian users, including social media campaigns, and shut down its Telegram support groups serving local users. The SC mandated compliance within 14 working days of the order, which began on December 11.
The SC specifically called on Bybit CEO Ben Zhou to ensure full adherence to the directive.
As per the SC, operating a DAX without registering as a Recognised Market Operator (RMO) is a violation of Malaysia’s Capital Markets and Services Act 2007. The regulator stated, “The SC views this breach seriously,” and emphasized that its primary goal is to protect investors by ensuring only approved entities operate in the country.
The SC also reiterated that engaging with unregistered platforms leaves investors unprotected under Malaysia’s securities laws. “This decision comes after concerns about the platform’s compliance with local regulatory requirements and protecting investors’ interests.” Such platforms, the SC warned, expose users to significant risks, including fraud and money laundering. To help mitigate these risks, the regulatory body has urged investors to only transact through licensed DAX operators
While cryptocurrencies are legal in Malaysia, they are not recognized as legal tender. Currently, only six exchanges are licensed to operate in the country.
Bybit has faced scrutiny from the SC since being added to its Investor Alert List in July 2021. The list highlights unregistered platforms and individuals that the SC advises investors to avoid. Similar regulatory actions were recently taken against other unlicensed entities, including Web3 wallet provider Atomic Wallet, which was flagged on December 23.
The latest development comes days after Bybit announced that it would halt withdrawal and custody services for users in France starting January 8, 2025, citing increased regulatory scrutiny from French authorities.
