Bybit’s Crypto Exit from Malaysia: What Happened?
In a bold move, Malaysia’s Securities Commission (SC) has instructed cryptocurrency exchange Bybit to halt its operations in the country, accusing the platform of running an unregistered digital asset exchange (DAX). As of December 27, Bybit has fully complied with the SC’s directive and suspended its services in Malaysia.
Why the Shutdown?
The SC, Malaysia’s financial watchdog, gave Bybit a 14-day deadline, starting on December 11, to disable its website, mobile apps, and any other digital platforms accessible to Malaysian users. The commission also ordered the exchange to stop all advertising aimed at Malaysian investors and to close its Telegram support group for local users.
Ben Zhou, Bybit’s CEO, was personally called upon to ensure the company adhered to the regulations. By December 27, the SC confirmed that Bybit had complied with the requirements.
The Bigger Picture: Bybit’s Global Challenges
The Malaysian regulatory action comes on the heels of another significant announcement from Bybit: the exchange revealed that it would be pulling out of France. Starting January 8, 2025, Bybit will cease offering withdrawal and custody services to its French customers, citing increased regulatory scrutiny from French financial authorities.
Malaysia’s Stern Stance on Crypto Platforms
Malaysia is making it crystal clear that crypto exchanges need to play by the rules. According to the SC, Bybit’s failure to register as a Recognised Market Operator (RMO) is a direct violation of Malaysia’s Capital Markets and Services Act of 2007. Operating a DAX without proper registration is considered a serious offense in the country.
The SC’s warning was loud and clear: Malaysian investors should only deal with crypto platforms that are fully registered and licensed by the Securities Commission. This is not just a formality—licensed operators must meet strict regulatory guidelines designed to protect investors and ensure market integrity.
Why Does This Matter?
The SC has highlighted that investors using unlicensed crypto platforms are putting themselves at serious risk, including exposure to potential money laundering and fraud. Without the protection of Malaysia’s securities laws, users are vulnerable to a host of financial threats.
Tightening the Noose on Crypto in Malaysia
2024 has seen Malaysia take a tougher stance on crypto-related activities. Back in June, the Inland Revenue Board of Malaysia launched “Ops Token,” a nationwide operation aimed at companies that failed to report their crypto trading activities for tax purposes. The operation uncovered evidence of tax evasion, with authorities seizing mobile devices and computers containing illicit crypto trading data.
In another crackdown, on December 23, the SC added the Web3 wallet service, Atomic Wallet, to its list of financial entities prohibited from operating in Malaysia. Like Bybit, Atomic Wallet was flagged for running a DAX without the necessary registration.
What Does This Mean for Investors?
If you’re based in Malaysia and are involved in crypto trading, it’s more important than ever to ensure you’re using platforms that are fully registered with the Securities Commission. The government is tightening its grip on the crypto industry, and non-compliant exchanges are facing major consequences.
So, whether you’re a seasoned crypto investor or just getting started, make sure your platform is above board. The last thing you want is to get caught up in an unregulated operation, especially when the stakes are this high!
Bybit’s exit from Malaysia is a wake-up call to all crypto exchanges and investors alike: regulations are tightening, and playing by the rules is no longer optional. The next few months could see even more scrutiny across the crypto space, both in Malaysia and globally. Stay informed, stay compliant, and keep your investments safe!
