Malaysia has been actively cracking down on illegal crypto operations and has issued a notice to Bybit Crypto Exchange. The Malaysian Securities Commission (SC) has directed Bybit to suspend its services in the country. According to an official SC statement, the Dubai-based exchange illegally operates its digital asset exchange (DAX) in Malaysia. Governments around the world are increasingly enforcing crypto exchange licensing requirements to protect their investors from scams and financial risks.
Bybit follows SC’s instructions by banning its website and mobile apps in Malaysia on December 27, SC said in an official post. The exchange has also stopped the distribution of advertising and social media content to promote its platform and services.
“This decision follows concerns about the platform’s compliance with local regulatory requirements and protecting the interests of investors. SC believes that this violation is due to Article 7(1) of the Capital Markets and Services Act of 2007, Operating DAX without SC registration as a Recognized Market Operator (RMO) is an offence.”
In early December, SC issued a notice to Bybit, raising concerns about its business. On December 11, Malaysian authorities gave Bybit 14 days to comply with the new directive to suspend its activities in the country.
As of now, the CEO of Baybit has not commented on the situation this week. Meanwhile, Malaysian regulators ensured that the exchange closed the country’s telegram support group.
Malaysian citizens are allowed to buy, hold and trade cryptocurrencies. According to a Freemanlaw report, under the supervision of SC, most Malaysian digital currencies are considered securities. In Malaysia, no cryptocurrency is considered fiat currency.
In June this year, the Inland Taxation Board (IRB), a federal agency in Malaysia, reportedly conducted a raid at multiple locations that determined that companies did not report their crypto-related activities.
SC reminds investors to interact only with recognized market operators (RMOs) registered with the Commission in an update regarding the suspension of BYBIT services. These registered entities must follow strict guidelines designed to ensure user protection.
“Those who invest in unlicensed or unregistered entities or individuals are not protected by Malaysian securities laws and are therefore subject to risks such as fraud and money laundering,” the SC noted.
