Malaysia Prohibits Bybit's Operations within Its Borders
In a significant move towards regulating the cryptocurrency market, the Securities Commission of Malaysia (SC) has ordered Bybit, a popular cryptocurrency exchange, to cease all activities in Malaysia by December 25, 2024. The exchange complied with the directive, shutting down its Malaysian operations late last year [1].
This action is part of Malaysia's stricter approach to regulating cryptocurrency exchanges, aimed at protecting investors. The SC’s enforcement highlights the regulatory expectation that crypto platforms must register and comply with local laws before operating [2]. Bybit's cooperation with the SC order sets a precedent for compliance by crypto firms, but also signals Malaysia’s intent to escalate oversight and enforcement actions against unlicensed crypto providers [1][4].
The SC's actions against Bybit follow a similar move against Huobi, another unregistered exchange, in May 2023 [3]. The summer of 2024 saw Malaysia targeting cryptocurrency traders in tax evasion raids [4][5]. These measures are designed to prevent unauthorized crypto activities, protect investors from unregulated platforms, and mitigate risks associated with money laundering and fraud [6].
The regulatory environment in Malaysia may tighten further, including ongoing monitoring and possible collaboration with regional agencies to combat crypto-related crimes seen in Asia [3]. This contributes to greater institutionalization and compliance in Malaysia’s crypto ecosystem, fostering safer trading conditions and enhancing investor confidence.
For investors, this means dealing only with exchanges registered under the SC to avoid scams or losses. Unauthorized crypto businesses face shutdowns, reducing illegal or unregulated entities in the market [7]. The SC is actively enforcing licensing requirements on crypto exchanges to ensure market integrity [2].
Bybit has taken several steps to comply with the SC's order. It has disabled its website, halted advertising in Malaysia, and closed its Telegram support group for Malaysian users [1]. Bybit's withdrawal from the French market, scheduled for January 8, 2025, is not related to the SC's order and is due to changes in local regulations [8].
In conclusion, the Securities Commission of Malaysia's actions against Bybit and Huobi underscore the country's commitment to regulating the cryptocurrency market and protecting investors. As the crypto ecosystem continues to evolve, it is expected that regulatory bodies will play an increasingly important role in ensuring market integrity and investor protection.
[1] https://cryptoslate.com/bybit-leaves-malaysia-after-sc-orders-the-exchange-to-halt-operations/ [2] https://www.thestar.com.my/business/business-news/2024/12/28/sc-orders-bybit-to-cease-all-activities-by-december-25 [3] https://www.straitstimes.com/business/companies-markets/malaysias-securities-commission-orders-bybit-to-cease-operations-in-malaysia [4] https://www.reuters.com/business/finance/malaysia-regulator-orders-bybit-stop-operations-malaysia-sources-2024-11-24/ [5] https://www.bnnbloomberg.ca/malaysia-targets-cryptocurrency-traders-in-tax-evasion-raids-1.1777574 [6] https://www.sc.com.my/media/news/2024/07/16/sc-takes-enforcement-action-against-bybit-for-operating-without-registration [7] https://www.thestar.com.my/business/business-news/2024/12/28/bybit-to-leave-malaysia-amid-regulator-scrutiny [8] https://www.crypto-news-flash.com/bybit-to-exit-french-market-in-january-2025/
- The Securities Commission of Malaysia's (SC) actions towards unregistered cryptocurrency exchanges, such as Bybit and Huobi, demonstrate the industry's increasing focus on finance and fintech regulation, aiming to create a safer and more compliant market.
- As the SC continues to enforce licensing requirements on crypto exchanges, and engage in regional collaborations to combat crypto-related crimes, it becomes evident that the finance sector in Malaysia is trending towards greater institutionalization and transparency.
