Key Points
- The Securities Commission Malaysia (SC) has mandated cryptocurrency exchange Bybit to disable all its services in Malaysia within 14 business days of December 11, 2024, due to operating without proper registration as a Digital Asset Exchange (DAX).
- Bybit and its CEO Ben Zhou, who have been on SC’s Investor Alert List since July 2021, must immediately terminate all Malaysian operations including website access, mobile applications, advertising, and local Telegram support groups.
Regulatory Crackdown on Unauthorized Exchange
The Securities Commission Malaysia (SC) has taken decisive enforcement action against cryptocurrency exchange Bybit, ordering the platform to cease all operations within the country due to unauthorized Digital Asset Exchange (DAX) activities. The directive gives Bybit 14 business days (starting on December 11, 2024) to disable its website, mobile applications, and other digital platforms accessible to Malaysian users.
CEO Accountability and Compliance Measures
Ben Zhou, Bybit’s CEO, has been personally directed to ensure compliance with the shutdown orders. The exchange has already begun implementing the SC’s directives, which include immediate termination of all advertising activities targeting Malaysian investors and the closure of Malaysia-specific Telegram support groups. Both Bybit and Zhou have been listed on the SC’s Investor Alert List since July 2021.
Regulatory Framework and Investor Protection
The enforcement action stems from Bybit’s violation of Section 7(1) of the Capital Markets and Services Act 2007, which requires digital asset exchanges to register as Recognized Market Operators (RMO). The SC emphasized that unregistered platforms pose significant risks to investors, including potential exposure to fraud and money laundering activities. Malaysian investors are strongly advised to conduct transactions only with registered RMOs that operate under the protection of local securities laws.
