Malaysia Regulators Clarify Approach to ICO, Crypto Trading Oversight
Bank Negara Malaysia and Securities Commission Malaysia have issued a joint statement to elaborate on their policy for regulating cryptocurrency trading and ICOs.
Malaysian regulatory bodies have provided details regarding their intentions to regulate digital asset trading so as to protect investor interests and promote fair and orderly trading. The statement issued by the Securities Commission Malaysia (SC) and Bank Negara Malaysia (BNM) defines digital assets as digital currencies and digital tokens.
“SC will regulate issuances of digital assets via initial coin offerings (ICO) and the trading of digital assets at digital asset exchanges in Malaysia. 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,” the regulators said.
Under the rules, cryptocurrency exchanges and ICO projects will be obligated to follow the ‘Guidelines on Prevention of Money Laundering and Terrorism Financing’ set by the SC. This means all digital currency traders and ICO issuers should apply for licenses from BNM, particularly when things relate to currency matters and payments.
However, the central bank used the opportunity to reiterate that digital assets are not legal tender in Malaysia, advising the public to weigh carefully the risks involved in digital assets trading.
“In order to implement the regulatory framework on digital assets, the SC and BNM will enter into coordination arrangements to ensure compliance with laws and regulations under the purview of both regulators,” the statement added.
The move by the BNM and SC comes after the University of Malaya’s Faculty of Law released a report in July urging lawmakers to prioritize the establishment of an effective environment for the blockchain industry.
“The report is prepared with the objective of encouraging economic development in Malaysia without stifling innovation or compromising consumer protection by providing support to startups, small-medium enterprises and large corporations in their endeavors to adopt blockchain technology,” the authors noted.
Early this year, Malaysian authorities launched an extensive investigation into criminal activities involving cryptocurrencies and sent police officers on educational courses about the new technology.