The Securities Commission Malaysia (SC) instructed Bybit Technology Ltd to disable its website and mobile applications in Malaysia. This enforcement action targeted the cryptocurrency exchange for operating without proper registration.
Bybit, previously known as Bybit Fintech Ltd, and its CEO Ben Zhou, violated Malaysian securities laws, according to The Edge Malaysia. The SC confirmed that Bybit has complied with all directives so far.
Regulatory Warnings for Unregistered Entities
The SC cautioned investors against engaging with unregistered entities. It emphasized the lack of protection under Malaysian securities laws. Such dealings expose investors to risks, including fraud and money laundering.
The SC also directed Bybit to halt all promotional activities targeting Malaysian investors. This included advertisements on social media platforms and the closure of its Telegram support group for local users.
This decision highlights concerns about Bybit’s regulatory compliance and the protection of investor interests. Bybit and its CEO have appeared on the SC’s Investor Alert List since July 2021 for their unauthorized operations.
Bybit Responds to Regulatory Actions
Rumors suggest that Bybit is working to obtain regulatory approval. Its mobile and web applications will likely display “IP address restricted” messages for Malaysian users in compliance with SC directives.
Operating a digital asset exchange without registration as a recognized market operator violates Section 7(1) of Malaysia’s Capital Markets and Services Act 2007. The SC urged investors to interact only with recognized market operators. These entities adhere to strict compliance measures and regulatory oversight.
Malaysia’s History of Enforcement in the Crypto Sector
In May of the previous year, the SC ordered Huobi Global to halt operations for failing to register its trading services. Currently, six cryptocurrency trading platforms are officially registered in Malaysia. These include HATA Digital, Luno, SINEGY, MX Global, Tokenize Technology, and Torum International.
Economic Impact of Illegal Bitcoin Mining in Malaysia
Illegal Bitcoin mining has become a growing concern in Southeast Asia. Operators exploit the region’s low electricity costs. In Malaysia, illegal operations have stolen electricity worth about $723 million between 2018 and 2023.
Authorities responded with strict measures, including destroying over $1.2 million worth of confiscated mining equipment. Earlier this year, Malaysian law enforcement dismantled a forex investment fraud and cryptocurrency syndicate. This group laundered funds from overseas scams and was targeted in multiple raids across Klang Valley in May.
Adoption of Biometric Technology for Digital Transformation
Malaysia has embraced Worldcoin’s iris scan technology as part of its digital transformation strategy. This advanced biometric system enhances the verification of digital credentials. Malaysia approved public trading for the Worldcoin token on recognized digital asset exchanges.
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