Luno aims to make it safer to invest in crypto currencies, writes Izwan Ismail
WE have heard a lot about crypto currencies in the past few years and how these digital assets can be good investments. At the same time, there have been reports about scammers, resulting in people becoming wary of investing in them.
According to Luno Malaysia country manager Aaron Tang, all this has now changed as the Securities Commission regulates companies involved in the trading of crypto currencies.
“The regulations governing crypto currencies were put in place last year. They listed the approved crypto coins and the various requirements for digital asset exchange companies to be approved and regulated.”
Luno (www.luno.com/en/my) is one of the first companies to be approved by the Securities Commission’s cyrpto currency exchange platform.
About three years ago, a lot of people were interested in crypto currencies but at that time, there was no regulation by the government and no approved crypto currencies.
“This made it difficult for people to determine whether the platform they were interested in was a scam or not,” says Tang.
“However, as mentioned above, things have changed with regulations in place. This is a good move as it brings certainty and peace of mind to investors.
For companies that want to apply to be a digital asset exchange, the requirements can be lengthy.
Firstly, it has to be a locally incorporated company with a minimum capital of RM5 million.
“There are a lot of other platforms that operate from overseas. To be approved by the Malaysian government, the companies need to be registered and have an office here,” says Tang.
Another requirement is the use of a trust company or trustee, an independent party that watches over the funds that investors put into the platform.
“This is similar to how other investment platforms such as unit trusts, bonds and peer-to-peer lending work,” he says.
MAKING IT SAFER
Luno aims to make it easy and safe for people to learn and invest in crypto currencies.
“We are regulated by the Securities Commission, the same body that regulates all the other investment or fund-raising companies in the country,” says Tang.
“We make it easy and safe for people to buy, sell and learn about crypto currencies like Bitcoin.
“We have a website and an app on crypto currencies. We’re doing it in a safe and regulated way.”
Currently, there are only two crypto currencies — Bitcoin and Ethereum — approved for trading in Malaysia.
One unit of Bitcoin is now valued at about RM39,000.
LOCAL PERSPECTIVE
Although the usage of crypto currency is still low in Malaysia, Tang believes that the situation will change in the near future.
“We are still at infancy stage and most people buy the currencies for long-term investment. Some people refer to it as digital gold, where they hold it and wait for the price to appreciate.”
“Right now, it’s more of an investment. People are still not able to trade with it here, like buying things on the Internet and do daily transactions. However, this may happen in the near future.
“In countries like Japan, people have been using crypto currencies for trading and buying things at shops,” he adds.
Luno allows people to buy crypto currency at as low as RM3. It is currently being used by three million people in 40 countries, including Europe, Southeast Asia and Africa.