Bybit Exchange is facing a regulatory roadblock in Malaysia as the country tightens its compliance demands
Cryptocurrency exchange Bybit faces regulatory challenges in Malaysia and may have to seize regional operations. This development comes after Malaysia’s Securities Commission (SC) placed an enforcement action against the crypto exchange and its CEO, Ben Zhou. Both entities were accused of operating a crypto asset trading platform without proper registration.
Bybit Needs a Licence to Operate in Malaysia
Bybit is expected to suspend its website, mobile applications, and other digital platforms operating in Malaysia. In addition, the crypto exchange can no longer advertise any of its products to Malaysian investors. It also has to suspend its Telegram support group for Malaysians. The authorities gave the firm 14 business days to pack up its business, starting from December 11.
In this regard, Zhou and Bybit are not first-time offenders, as they were already listed in the regulator’s Investor Alert List since July 2021 for the same regulatory violation. The SC explained the situation to members of the public, stating that the decision was necessary to protect the interest of investors and ensure compliance with local regulatory requirements.
“Operating a DAX without obtaining the SC’s registration as a Recognised Market Operator (RMO) is an offence under Section 7(1) of the Capital Markets and Services Act 2007,” Malaysia’s SC wrote in its statement.
For clarity, the regulator highlighted that only six crypto-asset exchanges are currently registered to operate in Malaysia.
Hence, Malaysian securities laws do not protect investors who conduct business on unregistered platforms. The regulator wrote that this group of people allegedly stand a higher risk of falling victim to financial crimes.
Protecting Crypto Investors: a Collective Effort
In many other regions, the authorities and regulators are building structures to handle crypto scams and protect investors’ interests.
On December 4, the Australian Securities and Investments Commission (ASIC) unveiled its updated consultation paper. Based on the agency’s exposition on the paper, the new guidelines are focused on clarifying the regulation of digital assets and stablecoins.
As an organization, financial leader Revolut recently boosted crypto security by introducing an enhanced fraud protection tool. The company plans to integrate its trusted payment security solution, Revolut Pay, into the crypto ecosystem in early 2025.
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