Malaysia’s Securities Commission Directs Bybit to Cease Operations

The Securities Commission Malaysia (SC) has instructed Bybit Technology Ltd to deactivate its website and mobile services within the country, citing enforcement actions against the cryptocurrency exchange for operating without the necessary registration.

Bybit, formerly known as Bybit Fintech Ltd, along with its CEO Ben Zhou, has faced reprimands for breaching Malaysian securities regulations, according to a report by The Edge Malaysia.

The SC noted that Bybit has adhered to all directives issued thus far.

Malaysian Regulator Cautions Against Unregistered Entities

The SC cautioned that investors dealing with unregistered entities lack protection under Malaysian securities laws and are exposed to risks such as fraud and money laundering.

The SC has also directed Bybit to immediately halt all promotional activities aimed at Malaysian investors, including advertisements on social media, and to disband its Telegram support group for local users.

This decision arises amid concerns regarding Bybit’s adherence to regulatory requirements and the safeguarding of investor interests.

Bybit and its CEO have been included on the SC’s Investor Alert List since July 2021, highlighting the platform’s unauthorized operations.

You’ll begin seeing “IP address restricted” in your Bybit apps.
Rumours suggest that Bybit is attempting to obtain regulation, hence they’ll comply with SC orders limiting access for Malaysian users. pic.twitter.com/Mt3TePqrVV

— Bitcoin Malaya (@bitcoinmalaya) December 30, 2024

Operating a digital asset exchange without registration as a recognized market operator constitutes a serious violation under Section 7(1) of Malaysia’s Capital Markets and Services Act 2007, the regulator stated.

The SC encouraged investors to engage only with recognized market operators, who are subject to regulatory oversight and must follow stringent guidelines to ensure investor protection.

In May of the previous year, the Securities Commission Malaysia also ordered Huobi Global to cease its operations due to its failure to register its trading services.

Currently, HATA Digital, Luno, SINEGY, MX Global, Tokenize Technology, and Torum International are the only registered cryptocurrency trading platforms in Malaysia.

Malaysia Faces Significant Losses from Illegal Bitcoin Mining Operations

Illegal Bitcoin mining has emerged as a growing issue in Southeast Asia, with operators capitalizing on the region’s relatively low electricity costs while evading the high energy expenses typically associated with cryptocurrency mining.

This practice has resulted in considerable financial losses in countries like Malaysia, where illegal mining operations have reportedly siphoned an estimated $723 million worth of electricity between 2018 and 2023.

In response, Malaysian authorities have implemented stringent measures, including the destruction of over $1.2 million worth of confiscated Bitcoin mining equipment.

Earlier in May, Malaysian authorities also disclosed that they dismantled a foreign exchange investment fraud and cryptocurrency syndicate that had been operating within the country.

The syndicate, which had been laundering funds obtained through overseas scams, was targeted in a series of raids conducted across the Klang Valley from May 13 to 21.

Earlier this year, Malaysia officially adopted Worldcoin’s iris scan technology as part of its digital transformation strategy.

Malaysia aims to utilize Worldcoin’s advanced biometric system to enhance the verification of digital credentials.

This development followed Malaysia’s approval of Worldcoin token public trading on digital asset exchanges recognized by the Malaysian authorities.

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