Key Insights
- Malaysia’s Securities Commission orders Bybit to suspend all operations within 14 days for operating without proper registration
- Both Bybit and CEO Ben Zhou have been on the regulator’s Investor Alert List since July 2021
- Bybit has complied with the enforcement action while facing similar regulatory challenges in France
KUALA LUMPUR (MarketsXplora) – Malaysia’s Securities Commission (SC) has issued an enforcement action against cryptocurrency exchange Bybit and its CEO Ben Zhou for operating without proper registration, ordering an immediate suspension of its services in the country.
The regulator has given Bybit 14 business days from December 11 to suspend its website, mobile applications, and other digital platforms in Malaysia. The exchange must also cease all advertising activities targeted at Malaysian investors and shut down its local Telegram support group.
The enforcement action follows concerns about the platform’s compliance with local regulatory requirements and investor protection measures. According to the SC, operating a Digital Asset Exchange (DAX) without registration as a Recognised Market Operator (RMO) violates Section 7(1) of the Capital Markets and Services Act 2007.
Both Bybit and Zhou have been listed on the regulator’s Investor Alert List since July 2021 for the same violation. The SC confirmed that Bybit has already complied with the enforcement directives.
“We understand that this may cause some inconvenience,” Bybit stated in its Malaysia Telegram channel, expressing hopes to resume operations once appropriate licenses are secured.
The SC emphasized that investors trading on unregistered platforms are not protected under Malaysian securities laws and face increased risks of financial crimes. Currently, only six crypto asset exchanges are registered to operate in Malaysia.
This regulatory challenge in Malaysia follows Bybit’s exit from France in August, where the exchange withdrew operations after the country tightened its licensing requirements in preparation for the European Union’s Markets in Crypto-Assets (MiCA) regulation.