From financemagnates by Arnab Shome

Bybit has ended its operations in Malaysia following an order from the Securities Commission Malaysia (SC). The SC flagged the cryptocurrency exchange giant for operating in the country without local registration. It held Bybit’s CEO, Ben Zhou, responsible for ensuring compliance.

Actions against Unregistered Platforms

The order came after the Malaysian regulator added Bybit to its “Investor Alert” list in 2021 for “operating a digital asset exchange (DAX) without registration.”

The list also includes many other crypto exchanges and contracts for differences (CFDs) brokers regulated outside Malaysia but not in the country. Recently, it also added Atomic Wallet, a cryptocurrency wallet platform. However, all these platforms share the list with other potentially fraudulent platforms, including clones of legitimate platforms.

Ben Zhou, Co-Founder and CEO of Bybit

The Malaysian regulator's latest order, which appears to have been communicated to Bybit on December 11, 2024, directed the exchange to disable its website and mobile applications in the country within 14 business days. Further, the Dubai-headquartered crypto exchange had to cease all online and offline advertisements and terminate the Telegram support group for Malaysians.

“This decision comes after concerns about the platform’s compliance with local regulatory requirements and protecting investors’ interests,” the regulator explained.

Crypto Giants Face Regulatory Challenges

Apart from the actions in Malaysia, the financial services watchdog in Cyprus also added Bybit’s name to its warning list last month for being an unregistered platform. However, the Cypriot regulator has not yet taken any further action.

Bybit is the second-largest centralized cryptocurrency exchange in terms of trading volumes with spot and derivative instruments, according to Coinmarketcap.com. In the last 24 hours, the platform handled over $4.6 billion in spot and $19 billion in derivatives trading volume, trailing only Binance.

The exchange is also strengthening its presence in strategic countries and has gained licenses in Kazakhstan and Georgia recently. It also holds a provisional license in Dubai and is now seeking authorization in Austria.

“Investors are reminded to invest and deal only with Recognized Market Operators that are registered with the SC,” the regulatory notice urged. “Registered RMOs have undergone strict regulatory scrutiny and are required to adhere to strict guidelines so that investors are protected under Malaysia’s securities laws.”

“Those who invest in unlicensed or unregistered entities or individuals are not protected under Malaysian securities laws and are thus exposed to risks such as fraud and money laundering,” the regulator warned.