Economy & Regulation
Malaysia’s 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.
‘Fair and Orderly Trading’
“The SC will regulate issuances of digital assets via ICOs and the trading of digital assets at digital asset exchanges in Malaysia,” the regulators said in a joint statement released Dec. 6. “Regulations 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,” they added.
Bitcoin and other digital currencies are not recognized as legal tender in Malaysia, but they aren’t 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: “Don’t do it,” advising to wait for guidance from the country’s 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.
Now the Securities Commission and Bank Negara are starting to put that regulatory framework together.