- Three exchanges have been given temporary licensing to operate in Malaysia by the Securities Commission
- The exchanges have 9 months to completely comply with regulatory requirements
- Those that did not receive approval have been asked to immediately cease all operations
- Unlicensed operation will lead to a 10-year jail sentence and a hefty fine
Malaysia has been on track with the cryptocurrency regulations. Exchanges looking to set up shop in the country were finally relieved after the Securities Commission of Malaysia issued guidelines for operating a digital asset platform in Malaysia this year after a lot of uncertainty especially after finance minister Lim Guan Eng had issued an order which stated that unlicensed businesses or Initial Coin offering (ICOs) would face a 10 year jail sentence and an RM10 million fine. With that out of the way, the SC announced today that it has registered 3 businesses to establish and operate in Malaysia.
One by one, countries are opening up
The registered institutions Luno Malaysia Sdn Bhd, SINEGY Technologies (m) Sdn Bhd, and Tokenize Technology (M) Sdn Bhd have received conditional approval from the regulator and have a total of 9 months to fully comply with all regulatory requirements prior to receiving a full license, the announcement states. The existing businesses that have not received approval from SC are requested to stop all activities immediately and reimburse all assets collected from investors. The list includes 19 exchanges that previously applied for licensing from the regulator.
Just like the exchanges, all cryptocurrencies and digital assets that will be traded on these exchanges will require state approval from the Securities Commission of Malaysia before they can be traded on any of the exchanges although no such official statement regarding the approval of any digital assets has been published. The announcement follows the implementation of the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) order 2019 on January 15 closely followed by the issuance of the revised Guidelines on Recognised Markets this January 31 to introduce new requirements for DAX operators.
In a media statement, the Securities Commission of Malaysia requested everyone to educate themselves about the risk of trading digital assets, including the severe risks of trading on unlicensed exchanges.
Crypto companies in Malaysia enthusiastic about the future
David Low, Luno Malaysia’s South East Asia General Manager stated that the regulation will further enhance transparency and protection for consumers. He believes that the Malaysian government’s regulation of digital assets shows the importance this budding industry is receiving from the regulatory bodies. Chan Wei Chi, Business Development Head of SINEGY, the only Malaysian start-up supported David by adding that this will ensure a safe and trustworthy market environment for consumers. Tokenize’s CEO, Qu Yi, shared with a local media outlet that they are ready to open trading to 10,000 users already on their waiting list.
Last month, SC Malaysia announced that they had recognized 8 new market operators which included three equity crowdfunding (ECF) and five peer-to-peer (P2P) financial platforms, and these are expected to be operational by the end of 2019. In April, the regulatory body had entered had joined hands with Bank Negara Malaysia, the country’s central bank to facilitate industry innovation, fundraising activities for start-ups and trading of digital assets. The partnership will also allow the oversight of digital asset activities and ensure a risk-free environment.