Malaysia’s Securities Commission Orders Bybit to Shut Down Operations

The Securities Commission Malaysia (SC) has directed Bybit Technology Ltd to disable its website and mobile applications in the country, citing enforcement actions against the cryptocurrency exchange for operating without proper registration.

Bybit, formerly known as Bybit Fintech Ltd, and its CEO Ben Zhou, have been reprimanded for violating Malaysian securities laws, according to a report by The Edge Malaysia.

Bybit has complied with all directives issued by the SC so far, the regulator noted.

Malaysian Regulator Warns Against Unregistered Entities

The SC warned that investors dealing with unregistered entities are not protected under Malaysian securities laws and are vulnerable to risks such as fraud and money laundering.

The SC has also instructed Bybit to immediately cease all promotional activities targeting Malaysian investors, including advertisements on social media, and to terminate its Telegram support group for local users.

The decision comes amid concerns about Bybit’s compliance with regulatory requirements and the protection of investor interests.

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

🚨 🚨 You will start seeing “IP address restricted” on your Bybit apps.

Rumours say that Bybit is trying to get regulated, hence they will comply to SC orders restricting 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 is a serious offence under Section 7(1) of Malaysia’s Capital Markets and Services Act 2007, the regulator stated.

The SC urged investors to engage only with recognized market operators, who are subject to regulatory oversight and must adhere to strict guidelines to ensure investor protection.

In May of the previous year, the Securities Commission Malaysia also ordered Huobi Global to cease its operations as it had failed 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 Suffers Huge Losses from Illegal Bitcoin Mining Operations

Illegal Bitcoin mining has become an increasing issue in Southeast Asia, with operators taking advantage of the region’s relatively low electricity costs while avoiding the steep energy expenses typically associated with cryptocurrency mining.

The practice has led to substantial economic losses in countries like Malaysia, where illegal mining operations have stolen an estimated $723 million worth of electricity between 2018 and 2023.

In response, Malaysian authorities have taken severe measures, including the destruction of over $1.2 million worth of confiscated Bitcoin mining rigs.

Back in May, Malaysian authorities also revealed that they dismantled a forex investment fraud and cryptocurrency syndicate that had been operating in 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 use Worldcoin’s advanced biometric system to enhance the verification of digital credentials.

The development came after Malaysia’s approval of Worlcoin token public trading on digital assets exchanges recognized by the Malaysian authorities.