New Crypto regulations in Malaysia come into effect
The Malaysian Securities Commission (SC) announced that newly amended regulations on cryptocurrency had come into effect on October 28, 2020. These regulations are also applicable to digital currency platforms.
The amendments were proposed and accepted by lawmakers in January, and came into effect now. The new regulations allow more government oversight over digital currency tokens by mandating them only using IEOs (Initial Exchange Offerings). Moreover, they offer more insight on the laws pertaining to digital asset custodians (DACs).
The SC clearly stated that it is the duty of platforms that host IEOs to vet the token issuers. The platforms would also have to review all the proposals and disclosures made by issuers publicly “on whitepaper”. It is compulsory for issuers to comply with SC’s Guidelines on Prevention of Money Laundering and Terror Financing.
Limitation on token issuers
Issuers of digital asset tokens will have a ceiling cap to consider under new legislation. Blockchain firms that raise funds in an ICO (Initial Coin Offering) have an upper limit on funds raised using coins and tokens – RM 100 million (approximately .5m). These companies are allowed to raise surplus funds from angel investors or other private investment rounds.
Companies offering digital assets, tokens, and services, along with companies offering IEOs are obligated to register with the Securities Commission. “Any person found to be operating a digital exchange or offering or distributing any digital assets without the SC’s authorization commits an offense and may be liable, on conviction, to a fine not exceeding ten million ringgit or imprisonment for a term not exceeding ten years or both”, stated the regulator authority.
Administration oversight on wallets
Malaysian authorities, led by the SC, were mulling over the idea of regulating crypto wallet providers along with cryptocurrency asset providers in July this year. Since these companies play an important role in safeguarding digital assets for custodians, the government was eyeing the creation of a regulatory framework.
In conclusion, Malaysian authorities are looking to create a strict administration around the dealings of digital assets.