Malaysia’s Securities Commission (SC) has ordered cryptocurrency exchange Bybit to halt all operations in the country, accusing the platform of running an unregistered digital asset exchange (DAX).
In a statement issued on Dec. 11, the SC instructed Bybit to disable its website, mobile applications, and other digital platforms within 14 business days. The regulator also directed the exchange to cease advertising its services to Malaysian investors and shut down its Telegram support group for Malaysian users.
Bybit’s CEO, Ben Zhou, was explicitly tasked with ensuring compliance with the SC’s directives. As of Dec. 27, the SC confirmed that Bybit had fully adhered to its orders.
Regulatory Scrutiny Tightens Globally
Bybit’s exit from Malaysia comes shortly after the exchange announced it would wind down operations in France. On Dec. 17, the company revealed plans to halt withdrawal and custody services for French users starting Jan. 8, 2025, citing increased regulatory pressure from French authorities.
The dual setbacks highlight the intensifying regulatory landscape for cryptocurrency exchanges worldwide, with financial watchdogs cracking down on platforms operating without proper licensing.
The SC justified its enforcement action by emphasizing the importance of compliance in protecting Malaysian investors. Operating an unregistered DAX violates Section 7(1) of the Capital Markets and Services Act 2007, the regulator noted, adding:
“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.”
The commission urged Malaysian investors to engage only with registered and regulated DAX platforms. Licensed operators are subject to stringent vetting and must adhere to regulatory guidelines designed to safeguard investors.
The SC also warned that users of unlicensed platforms are not protected under Malaysia’s securities laws, leaving them vulnerable to fraud, money laundering, and other financial crimes.
Malaysia’s Broader Crackdown on Crypto-Related Crime
Malaysia’s crackdown on Bybit aligns with the government’s broader efforts to combat crypto-related offenses throughout 2024.
In June, Malaysia’s Inland Revenue Board launched “Ops Token,” targeting companies that failed to report crypto trading activities. Authorities seized mobile devices and computers to gather evidence of tax evasion linked to cryptocurrency transactions.
On Dec. 23, the SC added Web3 wallet service Atomic Wallet to its blacklist of financial companies prohibited from operating in Malaysia. Similar to Bybit, Atomic Wallet was accused of running an unregistered DAX.
