Malaysia’s securities regulator orders Bybit to halt operations

Malaysia’s Securities Commission (SC) directed cryptocurrency exchange Bybit to cease operations in the country, accusing it of running an unregistered digital asset exchange (DAX).

The Malaysian securities regulator announced it had directed Bybit to disable its website, mobile applications or any other digital platforms within 14 business days starting Dec. 11. The regulator also ordered the exchange to stop circulating its advertisements to Malaysian investors and to terminate its Telegram support group for Malaysians. 

The SC specifically directed Bybit CEO Ben Zhou to ensure the company complied with all the directives. As of Dec. 27, the commission confirmed Bybit had done so.

The news followed Bybit’s announcement that it would halt its operations in France. On Dec. 17, the exchange said it would stop its withdrawal and custody services for French users starting on Jan. 8, 2025, citing increased regulatory scrutiny by French financial authorities. 

Cointelegraph approached Bybit for comments but had not received a response by publication.

Securities regulator urges investors to use regulated platforms

The SC said its enforcement action came as concerns about the platform’s compliance were raised. The SC stated: 

“The SC views this breach seriously, as operating a DAX without obtaining the SC’s registration as a Recognised Market Operator (RMO) is an offense under Section 7(1) of the Capital Markets and Services Act 2007.”

The SC urged Malaysians to engage only with registered DAX platforms. Licensed operators undergo stringent vetting and must adhere to guidelines aimed at protecting investors under Malaysia’s securities laws. 

The SC said users who invest in unlicensed entities are not protected by its laws, exposing them to money laundering and fraud risks. 

Related: FTX settles lawsuit against Bybit exchange for $228 million

Malaysia’s tightens reins on crypto

The Malaysian government made several moves to combat crypto-related crime throughout 2024. On June 17, Malaysia’s Inland Revenue Board conducted an operation called “Ops Token,” raiding companies that did not report their crypto trading activities to the federal agency. The police acquired evidence of tax evasion through crypto trading data stored in mobile devices and computers. 

On Dec. 23, the SC added Web3 wallet service Atomic Wallet to a list of financial companies prohibited from operating in Malaysia. Like Bybit, the company was flagged for operating a DAX without registration. 

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