The Securities Commission Malaysia (SC) has ordered Bybit Technology Limited, a well-known digital asset exchange, to stop operating in the nation in a major regulatory action. Bybit Ordered to Halt Bybit’s failure to register as a Recognized Market Operator (RMO), which Malaysian legislation requires to operate a digital asset exchange (DAX), is the reason for this direction.
Context of the Directive
According to the Supreme Court’s decision, all digital platforms accessible from Malaysia, including Bybit’s website and mobile apps, must be deactivated. This action must be completed no later than fourteen business days after December 11, 2024. Additionally, Bybit must promptly remove all ads targeting Malaysian investors and deactivate its user support group on Telegram. There have been previous concerns about Bybit’s business operations in Malaysia, as evidenced by its inclusion on the SC’s Investor Alert List since July 2021 and CEO Ben Zhou’s involvement.
Legal Framework and Regulatory Issues
According to Section 7(1) of the Capital Markets and Services Act of 2007, operating a DAX without proper RMO registration is illegal. The SC underlined that investors face serious dangers from these unregistered enterprises, such as the possibility of fraud and money laundering. The SC has continuously pushed for market integrity and investor safety, advising the public to only do business with registered RMOs that have passed rigorous regulatory inspection.
Malaysian securities regulations do not protect investors who interact with unauthorized businesses. The suspension may impact domestic and foreign players, lowering investor confidence in the larger cryptocurrency market. To restart services per the legislation, Bybit might need to review its operational plans in Malaysia and consider registering or restructuring.
Consequences for Bybit and Malaysia
This regulation shows the Malaysian government’s commitment to Bitcoin compliance. Noncompliance with local laws has led to Bybit’s suspension of service in Malaysia and other operational issues. Given this, Bybit must carefully rethink its Malaysian business. To resume operations in the country, the company must settle SC regulatory concerns.
This highlights the need for bitcoin exchanges to follow local rules to operate and protect investors. Bybit’s Malaysian law violations could have serious consequences. The exchange will temporarily cease operations, lowering its market share and user base nationwide. Malaysia’s regulatory move underlines the importance of cryptocurrency compliance to protect investors from financial risk and fraud.
Advisory Services for Investors
The SC recommends that investors work exclusively with registered RMOs to ensure compliance with Malaysian securities laws. Unregistered investment programs can be risky for investors. In emerging businesses like NFTs and tokenized assets, professional assistance can help investors manage digital assets.
These services provide vital regulatory, risk management, and market insights. Advisors advise investors on portfolio diversification, compliance with local laws, and decision-making. To avoid legal issues, market volatility, and financial losses, professional counsel is essential for investing in unregulated platforms like Bybit in Malaysia. A qualified advisor reduces regulatory and market risk.
For More: Crypto Weekly Stability Regulation and Key Move
Conclusion
The SC’s order to Bybit to suspend operations in Malaysia shows Malaysia’s rigorous digital asset exchange regulations. This highlights the importance of regulatory compliance and the need for Bitcoin platforms to follow national laws. Regulators and market actors must stay vigilant as the cryptocurrency landscape changes to ensure safe and open digital asset transactions.
