Malaysia Regulates Cryptocurrencies: Traders Must Comply With New Rule
Malaysia regulates cryptocurrencies as of today. The new rules affect both digital coins and ICOs (initial coin offerings). Though welcomed by many, the repercussions for those who don’t comply are deemed particularly harsh.
What will this mean for trading?
The country’s Minister for Finance, Lim Guan Eng, announced that the order to regulate cryptocurrencies and initial coin offerings as securities has come into force—effective today, January 15th.
Launching an unauthorized ICO or exchanging in cryptocurrencies without approval could result in a 10-year jail term and a $2.4 million USD fine:
“Any person offering an ICO or operating a digital asset exchange without SC’s approval may be punished, on conviction, with imprisonment not exceeding 10 years and fine not exceeding RM10mil [$2.44 million].”
Despite the harsh repercussions for illegal trading, Malaysia is predominantly pro cryptocurrency. The minister stated:
“The Ministry of Finance (MOF) views digital assets, as well as its underlying blockchain technologies, as having the potential to bring about innovation in both old and new industries. In particular, we believe digital assets have a role to play as an alternative fundraising avenue for entrepreneurs and new businesses and an alternative asset class for investors.”
So what does this mean for traders as Malaysia regulates cryptocurrencies?
An official framework will be launched by the end of Q1 this year. This will detail the exact regulatory requirements for launching an ICO and trading on digital exchanges in the country. In general, crypto services and exchanges must obtain authorization from Malaysia’s Securities Commission. This body will work with the central bank to ensure compliance.
As stated above, without official approval, traders face serious charges if caught.
Called ‘The Capital Markets and Services Order 2019,’ the next few months will prove crucial as traders and exchanges work to comply with the new relevant securities laws and seek approval by the commission.
India also recently regulated cryptocurrency. It spent most of 2018 implementing regulations for crypto services in its country.
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