KUALA LUMPUR: The Securities Commission says there are more than 50,000 active digital assets accounts in Malaysia currently.
The SC warned that digital asset offerings and crypto exchanges would be considered illegal if they failed to register with it by January 25, 2019.
The guidelines for the regulation of such offerings and exchanges to be introduced by March under the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019 will be similar to other digital asset exchanges in the world.
“We want the market to be in a safe and orderly fashion. We would also oblige our digital asset exchange operators to fulfil the KYC (Know Your Customer) and AMLA (The Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001) requirements,” said SC innovation, digital and strategy executive director Chin Wei Min at a briefing here today.
“In digital asset exchange guidelines, it will be slightly different from our traditional one because it is a little bit C2C (consumer to consumer). They will now have the obligation to do the due diligence,” Chin added.
He emphasised the move was about protecting investors.
“We go by principles. It (initial coin offering) is a fundraising activities. We need to recognise, take aside the frauds, even the legilimate ones — the failure rate is generally very high.
“We probably will start off a bit higher. If you are looking at the ones currently out there, the standards of white paper are of low quality.
“I think it is important that it falls under regulated activity. We recognise that this is an alternative fund raising,” he said.
“The point is to take out the scams, and to have a platform for entrepreneurs to raise money,” he added.
On January 17, 2019, the SC said during the transitional period, digital assets platform operators would not be permitted to accept new investors and only allows to facilitate the withdrawal or transfer of client assets with the written instruction of the investor.
“Existing platform operators who failed to or did not attend the engagement with the SC on January 17, 2019 are advised to contact the SC immediately and not later than January 25, 2019, failing which they shall be deemed to be operating a market in breach of the securities laws,” the SC had reportedly said, in a previous statement.
Once the relevant guidelines had been issued, existing platform operators must apply to the SC for authorisation if they planned to operate beyond the transitional period.
“Prospective operators can also apply to the SC for authorisation once the guidelines are issued. The SC will evaluate all applications and will only authorise market operators that fulfil the relevant requirements,” it had said.