Bybit News: Malaysia Orders to Cease Operations Amid Challenges

Bybit Ordered to Cease Operations in Malaysia Amid Regulatory Concerns

Malaysia’s Securities Commission (SC) has issued a directive requiring cryptocurrency exchange Bybit and its CEO, Ben Zhou, to halt all operations in the country. The regulatory move underscores growing scrutiny on digital asset platforms operating without proper authorization.

Malaysia’s Clampdown on Unregistered Platforms

The Securities Commission stated that Bybit had failed to obtain the necessary approvals to function as a Digital Asset Exchange (DAX) under the nation’s regulatory framework. Malaysian law, specifically the Capital Markets and Services Act of 2007, mandates that any platform facilitating cryptocurrency trading must secure Recognized Market Operator (RMO) status to operate legally.

Bybit’s non-compliance, the SC warned, poses significant risks to investors and undermines the integrity of Malaysia’s financial system. As part of its enforcement measures, the SC has ordered the crypto exchange to disable its website and mobile applications by December 25. The regulator also directed the cessation of all promotional activities targeting Malaysian investors and the immediate termination of the platform’s Telegram support group for users in the region.

Global Regulatory Pressures Intensify

Malaysia is not the only jurisdiction where Bybit has encountered regulatory pushback. Across various markets, the exchange has faced increasing scrutiny for operating without proper authorization.

Japan’s Regulatory Warning

Japan’s Financial Services Agency (FSA) recently issued warnings to Bybit, along with other exchanges like KuCoin and Bitget, for breaching the Payment Services Act. The FSA highlighted these platforms’ failure to register with the relevant authorities, a legal prerequisite for conducting cryptocurrency-related activities in Japan.

France Exit Amid Stringent Rules

In Europe, Bybit announced its withdrawal from the French market due to tightening regulatory requirements. Users in France were instructed to close all open positions and withdraw their assets ahead of the impending enforcement of the European Union’s Markets in Crypto-Assets (MiCA) regulatory framework.

These developments come as global regulators move toward stricter oversight of the cryptocurrency sector, seeking to mitigate risks associated with unregulated platforms.

Compliance and Strategic Expansion

While Bybit grapples with regulatory challenges, the platform remains committed to compliance and continues to pursue opportunities for expansion. In Malaysia, Bybit has taken steps to disable login access for local users starting December 24, aligning with the SC’s directive.

The company has also emphasized its intention to re-enter markets once it obtains the necessary regulatory licenses. In the meantime, Bybit is focusing on strengthening its presence in regions where it can operate legally.

New Markets and Licensing Efforts

Bybit recently announced its entry into the Austrian market, with plans to align its operations with the upcoming MiCA regulations in the European Union. The exchange has also obtained licenses to operate in Kazakhstan under the Astana Financial Services Authority (AFSA) and in Türkiye under the Capital Markets Board (CMB).

These strategic moves signal Bybit’s efforts to expand its global footprint while adhering to regulatory standards. However, the exchange remains inaccessible in key markets, including the United States, Canada, and the United Kingdom, due to existing restrictions.

A Balancing Act Between Compliance and Growth

Bybit’s regulatory hurdles highlight the challenges faced by cryptocurrency exchanges as they navigate an increasingly complex global regulatory landscape. While the exchange’s proactive steps toward compliance demonstrate a commitment to operating within legal frameworks, its ongoing struggles underscore the importance of obtaining proper licensing to secure long-term growth and credibility.

As the cryptocurrency industry matures, platforms like Bybit will need to strike a delicate balance between expanding their operations and adhering to regulatory requirements. The outcome of these efforts will not only shape the future of individual exchanges but also influence the broader trajectory of the digital asset sector.

Source: CoinChapter

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