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Malaysiaâs securities regulator and central bank are to strengthen their scrutiny of initial coin offerings (ICOs) through new rules meant to eliminate issues of unfair trade practices and alleged risk of money laundering and terrorism financing. The Securities Commission Malaysia (SC) and Bank Negara Malaysia (BNM) said they will also tighten regulation in the trade of cryptocurrencies to boost investor security.
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âFair and Orderly Tradingâ
âThe SC will regulate issuances of digital assets via ICOs and the trading of digital assets at digital asset exchanges in Malaysia,â the regulators said in a joint statement released Dec. 6. âRegulations are currently being put in place to bring digital assets within the remit of securities laws to promote fair and orderly trading and ensure investor protection,â they added.
Bitcoin and other digital currencies are not recognized as legal tender in Malaysia, but they arenât banned either. That means individuals or companies trading cryptocurrency are free to do so, but are not protected by law. However, under the anti-money laundering legislation, all crypto asset exchanges operating in Malaysia are subject to reporting obligations.
Malaysian finance minister Lim Guan Eng said cryptocurrency regulations will come into force during the first quarter of 2019. He also warned individuals and companies planning to issue new cryptocurrencies with a stern: âDonât do it,â advising to wait for guidance from the countryâs central bank.
Lim Guan Eng said the government was open to emerging forms of money such as virtual currency, but only if they adhere to the law.
 Enforcing Compliance
Now the Securities Commission and Bank Negara are starting to put that regulatory framework together. The two âwill enter into coordination arrangements to ensure compliance with laws and regulations under the purview of both regulators,â said the statement.
It added: âInitial coin offering issuers and digital asset exchanges which are involved in the issuance or dealing of digital assets with a payment function will need to comply with relevant BNM laws and regulations relating to payments and currency matters.â
Malaysia is slowly emerging as a hotbed of cryptocurrency trading. The government isnât particularly averse to the technology. For example, Pakatan Harapan, Malaysiaâs ruling party, is raising political funding through a cryptocurrency called âharapan coin,â in preparation for the 2019 general elections. Party officials say they have submitted documents of the harapan coin to Bank Negara for approval.
What do you think about the regulatory developments in Malaysia? Let us know in the comments section below.
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The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.