- Bybit and CEO Ben Zhou face increased scrutiny from Malaysia’s Securities Commission.
- The SC alleged that Bybit was operating as a crypto exchange without proper registration.
- The exchange promised to resume operations after securing a license from the SC.
Crypto exchange Bybit faces increased scrutiny from Malaysia’s Securities Commission (SC) for allegedly operating a digital asset exchange (DAX) without proper registration. In an official announcement on Friday, the regulator ordered Bybit to cease operations and suspend its website, mobile applications, and other digital platforms in the country.
According to the regulator’s statement, Bybit and CEO Ben Zhou have been on the commission’s Investor Alert List since July 2021. They were given a timeline of 14 business days from December 11, 2024, to suspend the platform’s activities. In addition to shutting down its local operations, the SC mandated Bybit to halt its advertising activities and discontinue support services for users in Malaysia.
Bybit’s failure to register as a Recognized Market Operator (RMO) with the SC is a serious offense under Section 7(1) of the Capital Markets and Services Act 2007. The SC has cautioned investors about the risks of dealing with unregistered crypto exchanges, emphasizing that they will not be protected under Malaysian securities laws. The regulator warned that trading on such platforms exposes investors to a higher risk of financial crimes. Currently, only six crypto exchanges operate in the country, complying with the securities laws.
Revolut to Boost Crypto Security with New Fraud PreventionThe SC’s statement revealed that the decision comes due to concerns about Bybit’s compliance with local regulations and investor protection. However, the regulators acknowledged that Bybit has complied with the SEC’s enforcement actions. Further alerting the Malaysian crypto traders, the SC stated,
The public should alert the SC if they come across any suspicious websites or receive any unsolicited phone calls or emails offering unauthorized investment schemes, especially those that promise high returns with little or no risks.
Following the SC’s warning, Bybit Malaysia reassured its customers that it would resume its operations in the country once it obtains the necessary licenses from the SC. Bybit acknowledged that the temporary suspension may cause inconvenience to its users.
