The Securities Commission of Malaysia has ordered Bybit and its principal officer to cease operating all digital platforms in Malaysia and also cease all advertisements targeting the Malaysian public.
The SC published in its press release that it has initiated enforcement proceedings against Bybit, a cryptocurrency exchange, and its business leader, Ben Zhou, for offering a crypto sales platform without adequate registration on December 27. The platform had been ordered to cease all digital platforms operating in Malaysia from December 11, within 14 working days. This also includes Bybit’s website and mobile applications. The company must also stop advertising to Malaysian investors and deactivate its local Telegram support group.
The SC raised concerns about Bybit’s compliance with legal obligations and investor protection. The regulator said offering digital asset exchange to companies without obtaining the registration of a recognized market operator by the SC is an offense under Section 7(1) of the Capital Markets and Services Act 2007. Both Bybit and Zhou are already included in the SC’s Investor Alert List for similar regulatory violations since July 2021.
Bybit has complied with enforcement guidelines, SC reiterated. However, it also warned Malaysian investors that trading with unregistered platforms means they are not protected under Malaysia’s securities laws, making them more susceptible to financial crimes. There are now only six registered crypto exchanges that can legally operate in Malaysia: HATA Digital Sdn Bhd, Luno Malaysia Sdn Bhd, MX Global Sdn Bhd, SINEGY DAX Sdn Bhd, Tokenize Technology Sdn Bhd and Torum International Sdn Bhd.
Bybit confirmed the enforcement action on its Malaysian Telegram channel, saying they realize it may cause some inconvenience. The exchange also noted that there is hope to reconnect with Malaysian investors in the future if and when they obtain the necessary licenses.
“We understand that this may cause some inconvenience. Once we have obtained the appropriate licenses, we look forward to connecting with you again in the future.“
ByBit’s Malaysian Telegram message
This is the second European country where Bybit’s operations have recently been affected. In August, Bybit exited the French market after the country introduced stricter licensing requirements in preparation for the European Union’s regulation of crypto asset markets. This led to a risk of non-compliance for Bybit in multiple jurisdictions, which has highlighted regulatory scrutiny of crypto exchanges in recent times.
