Cryptocurrency Regulation Now In Effect In Malaysia

News, Regulation | January 15, 2019 By:

The Securities Commission Malaysia (SC) has announced that guidelines to regulate crypto trading and initial coin offerings (ICO) will go into effect today.

In a statement, Malaysian Finance Minister Lim Guan Eng said that digital currencies and digital tokens as defined in the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019 were prescribed as securities and would be regulated by the SC. Companies dealing in cryptocurrencies will be required to put in place anti-money laundering and counter-terrorism financing (AML/CFT) rules, cyber security and business continuity measures.

“The ministry views digital assets, as well as its underlying blockchain technologies, as having the potential to bring about innovation in both old and new industries,” Eng said. “In particular, we believe digital assets have a role to play as an alternative fundraising avenue for entrepreneurs and new businesses, and an alternate asset class for investors.”

The SC said that it “will enter into coordination arrangements” with the Bank Negara Malaysia, the country’s central bank, in order “to ensure compliance with laws and regulations under the purview of both regulators.”

“Any person offering an ICO or operating a digital asset exchange without SC’s approval was liable, upon conviction, to be imprisoned not exceeding 10 years and fine not exceeding RM10 million ($2.4M USD),” Eng said.

The news came after the Malaysian central bank published a list of companies that have declared themselves as crypto exchanges or service providers. These include Belfrics Malaysia, Bit Malay, Bitpoint Malaysia, Bit Trade Enterprise, Bong Technology, Bxm, Luno Malaysia, Openbit, Udax International, Upbit Malaysia, and Xbit Asia. However, the central bank emphasized that it has neither licensed nor authorized these businesses.