Malaysian central bank and securities regulator issue joint statement on crypto and ICO regulation

Bank Negara Malaysia (BNM) and the Securities Commission Malaysia (SC) today issued a joint statement on the regulation of digital assets in the country.

The statement follows recent comments from Finance Minister Lim Guan Eng who said that the regulations for cryptocurrency exchanges and initial coin offerings (ICOs) will go into effect in Malaysia by the first quarter of 2019.

The central bank and the SC said that the joint press release is aimed at providing clarity on the regulatory approach for the offering and trading of crypto assets in Malaysia. To implement the crypto regulatory framework, the BNM and the SC said that they will enter into coordination arrangements to ensure compliance with laws and regulations under the purview of both regulators.

They clarified:

“SC will regulate issuances of digital assets via initial coin offerings (ICO) and the trading of digital assets at digital asset exchanges in Malaysia. Regulations are currently being put in place to bring digital assets within the remit of securities laws to promote fair and orderly trading and ensure investor protection.

“ICO issuers and digital asset exchanges which are involved in the issuance or dealing of digital assets with a payment function will need to comply with relevant BNM laws and regulations relating to payments and currency matters. In addition, ICO issuers and digital asset exchanges are subject to SC’s Guidelines on Prevention of Money Laundering and Terrorism Financing.”

BNM reiterated that digital assets are not legal tender in Malaysia and cautioned investors to carefully evaluate the risks associated with dealings in digital assets.