The Securities Commission Malaysia (SC) has reprimanded Bybit Technology Limited (previously known as Bybit Fintech Limited) (Bybit), and its Chief Executive Officer Ben Zhou (Yuchen Zhou) for operating a digital asset exchange (DAX) in Malaysia without registration.

The regulator said in a statement on Friday that Bybit and Zhou have been included in the SC’s Investor Alert List since July 2021.

In this regard, the SC has directed Bybit to disable Bybit’s website and mobile applications or any other digital application platform in Malaysia within 14 business days from December 11, 2024; immediately cease circulating, publishing or sending any advertisements, whether in social media posts or otherwise, to Malaysian investors; and immediately terminate Bybit’s Telegram support group for Malaysians.

Zhou, as the Chief Executive Officer of Bybit, has also been specifically directed to ensure that the above directives are complied.

This decision comes after concerns about the platform’s compliance with local regulatory requirements and protecting investors’ interests.

The SC views this breach seriously, as operating a DAX without obtaining the SC’s registration as a Recognized Market Operator (RMO) is an offence under Section 7(1) of the Capital Markets and Services Act 2007.

As of to date, Bybit has complied with all of the SC’s directive.

“Investors are reminded to invest and deal only with Recognized Market Operators that are registered with the SC,

“Registered RMOs have undergone strict regulatory scrutiny and are required to adhere to strict guidelines so that investors are protected under Malaysia’s securities laws,” said SC.

I noted that those who invest in unlicensed or unregistered entities or individuals are not protected under Malaysian securities laws and are thus, exposed to risks such as fraud and money laundering.

“The public should alert the SC if they come across any suspicious websites or receive any unsolicited phone calls or emails offering unauthorized investment schemes, especially those that promise high returns with little or no risks,” it added.

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