Malaysia’s Finance Minister YB Tuan Lim Guan Eng announced that cryptocurrencies and initial coin offerings have come under regulation on Tuesday.
As per the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019, crypto currency service providers and exchanges are required to obtain authorization from the country’s Securities Commission, which will work with the central bank to ensure compliance.
The Securities Commission Malaysia (SC) said it will issue guidelines to regulate offering and trading of digital assets.
The guidelines will establish criteria for determining eligible crypto issuers and exchange operators, set disclosure standards and best practices in price discovery, trading rules and client asset protection. Those dealing in digital assets will be required to put in place anti-money laundering and counter-terrorism financing (AML / CFT) rules, and cyber security and business continuity measures.
The Securities Commission said that in order to implement the regulatory framework on digital assets, it will coordinate with the Bank Negara Malaysia, the country’s central bank, to ensure compliance with laws and regulations.
The relevant regulatory framework is expected to be launched by the end of the first quarter.
“Any person offering an ICO or operating a digital asset exchange without the Securities Commission ‘s approval may be punished, on conviction, with imprisonment not exceeding 10 years and fine not exceeding RM 10 million ($2.44 million],” The Star quoted Finance Minister Lim as saying.
Meanwhile, Malaysia’s central bank made it clear that cryptocurrencies are not legal tender.