Malaysia Prohibits Bybit Activities
In a recent development, the Securities Commission of Malaysia (SC) has taken action against two major cryptocurrency exchanges, Bybit and Huobi, for operating without registration. This move is part of a broader crackdown on unregistered cryptocurrency exchanges in the country and a proactive approach to enforce regulatory compliance and prevent tax evasion in the crypto market.
Bybit, a popular global cryptocurrency exchange, has been ordered to cease all activities by December 25 by the SC. In compliance with the order, Bybit has closed its Telegram support group for Malaysian users, halted advertising in Malaysia, and disabled its website. The exchange has also announced its withdrawal from the French market, halting all services from January 8, 2025, due to changes in local regulations.
Similarly, Huobi, another significant player in the crypto market, faced similar action from the SC in May 2023. The raids conducted by Malaysia in the summer of 2024 targeted cryptocurrency traders for tax evasion, potentially indicating a connection between the regulatory actions and the government's efforts to combat tax fraud.
Dealing with unlicensed entities like Bybit and Huobi poses several risks for investors. Regulators warn such platforms expose investors to considerable risks including:
- Lack of investor protection and recourse mechanisms under local laws.
- Potential for sudden service disruptions, withdrawal freezes, or account access issues due to non-compliance actions.
- Increased likelihood of legal actions, regulatory sanctions, or bans affecting funds and trading availability.
- Possible exposure to fraud and inadequate operational standards that regulation aims to prevent.
The warnings by the Philippine Securities and Exchange Commission (SEC) explicitly emphasize that operating without registration contravenes local laws designed to protect investors. The French case shows how regulatory crackdowns can force exchanges to cease services, potentially disrupting user access to assets or requiring migration to licensed custodians.
The Securities Commission of Malaysia (SC) is enforcing these measures to mitigate the risks of money laundering and fraud associated with unlicensed entities like Bybit. The actions against Huobi and Bybit suggest a broader crackdown on unregistered cryptocurrency exchanges in Malaysia, indicating a continued focus on regulatory compliance for cryptocurrency exchanges.
In summary, the regulatory actions against Bybit and Huobi in Malaysia serve as a reminder for investors to be cautious when dealing with cryptocurrency exchanges that have not secured proper licenses. These risks include service interruptions, lack of protections, and greater exposure to legal complications and market uncertainty due to non-compliance. As governments worldwide tighten crypto exchange regulations, it is crucial for investors to stay informed and prioritise platforms that adhere to local laws and regulations.
[1] Philippine SEC warns Bybit and other major exchanges for operating without licenses
[2] Bybit to stop withdrawal and custody services for French users due to regulatory pressures
[4] Raids in Malaysia targeting cryptocurrency traders for tax evasion
- It is important for investors to be cautious when dealing with cryptocurrency exchanges like Bybit and Huobi, as they have been operating without registration in the fintech industry, which poses risks such as service interruptions, lack of protections, and increased exposure to legal complications.
- In response to increased regulatory pressure, Bybit, a major player in the fintech sector, has announced its withdrawal from the French market, halting all services due to changes in local regulations, highlighting the importance of compliance with finance regulations for cryptocurrency exchanges.
