Malaysia’s Securities Watchdog

Malaysia’s securities watchdog Securities Commission (SC) will start regulating ICOs and cryptocurrency market as securities from Tuesday. This is because the “Capital Markets and Services” will come into effect from January 15, 2019.

Following a statement from Malaysian Finance Minister Lim Guan Eng on Monday morning, the decision has been taken to implement the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019 from tomorrow. In his statement, Finance Minister Lim Guan Eng said:

“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 10 million Malaysian ringgits,” which is equivalent to US$2.44 million.

Malaysia’s Securities Watchdog

The prescription order means that the Initial Coin Offerings (ICOs) must need approval from the Securities Commission to start their operations. In fact, they also need to comply with the Malaysian securities laws. The SC has went on to say that it’ll work with the central bank for issuing a complete legal framework on digital assets by the first quarter of 2019.

The Securities Commission went on to explain that:

“The guidelines will among others, establish criteria for determining fit and properness of issuers and exchange operators, disclosure standards and best practices in price discovery, trading rules, and client asset protection.”

The securities watchdog also said that the entities which deal with the digital assets should comply with the counter-terrorism financing as well as anti-money laundering rules. In addition, they have to follow the measures related to cybersecurity as well as business continuity.

Lim Guan Eng, Finance Minister of Malaysia, said:

“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.”

However, the statements have left many uncertainties among users. One of the most important things where uncertainty has cropped up is that of the cryptocurrency’s regulatory status vis-à-vis Initial Coin Offerings (ICOs) in Malaysia.


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