Malaysia Put a Halt on Bybit's Operations
In a move to protect investors and uphold financial integrity, the Securities Commission of Malaysia (SC) has been enforcing measures against unregistered cryptocurrency exchanges. This summer of 2024, the commission conducted tax evasion raids targeting cryptocurrency traders, and in May 2023, it took similar action against Huobi, accusing it of operating without registration.
The latest target is Bybit, a cryptocurrency exchange that has been ordered to cease all activities in Malaysia. Bybit has not complied with the SC's order, as it is listed among unauthorized crypto platforms marketed to residents in the region without local registration or licensing. The SC Malaysia includes Bybit on its Investor Alert List, advising the public not to invest or trade through such unregistered platforms.
The implications for the Malaysian cryptocurrency market are significant. Unregistered platforms like Bybit expose investors to risks such as fraud, total loss of funds, and lack of legal recourse. The SC warns it will enforce actions against unauthorized operators, including website blocking and criminal complaints, to protect investors.
Systemic risks are also a concern. Unauthorized exchanges may be exploited for money laundering and terrorist financing, posing further risks to Malaysia’s financial system and reputational damage. Moreover, Malaysia treats cryptocurrencies as securities, requiring exchanges to comply with strict licensing and regulatory standards. Bybit’s non-compliance highlights ongoing challenges for regulator control over cross-border crypto platforms.
Bybit's non-compliance has led to various actions. The exchange has halted advertising in Malaysia, disabled its website and mobile apps, and closed its Telegram support group for Malaysian users. However, it has not complied with the SC's order to cease operations by a specific date.
Huobi, another cryptocurrency exchange, has been ordered by the SC to cease all activities, but details about its compliance are not available. Similarly, there is no information on any penalties or fines imposed on Huobi by the SC.
The Securities Commission of Malaysia's actions against Bybit and Huobi indicate a broader crackdown on unregistered cryptocurrency exchanges in Malaysia. This move is part of a global trend towards stricter cryptocurrency regulation to ensure investor protection and financial stability.
It is important to note that Bybit's withdrawal from the French market, effective from January 8, 2025, is not related to the SC's order for it to cease operations in Malaysia.
In summary, the Securities Commission of Malaysia is taking decisive action against unregistered cryptocurrency exchanges like Bybit and Huobi to protect investors and maintain the integrity of the Malaysian cryptocurrency market. Investors are advised to exercise caution and only engage with registered and licensed platforms.
- In line with their efforts to maintain financial integrity and protect investors, the Securities Commission of Malaysia (SC) has issued a cease and desist order to Bybit, a fintech company operating in the cryptocurrency industry, for its non-compliance with local regulations.
- The Malaysian cryptocurrency industry faces potential fintech-related risks, as the SC encourages investors to avoid unregistered platforms like Bybit to prevent losses, fraud, and possible money laundering activities, thereby preserving the country's financial and reputational standing.
