Malaysia’s Securities Watchdog Imposes Severe Legislation on Cryptos and ICOs Today

2019-1-15 13:15

CoinSpeaker
Malaysia’s Securities Watchdog Imposes Severe Legislation on Cryptos and ICOs Today

Malaysia joins major economies across the globe who are working on regulatory measures for the crypto market. Starting today, January 15, Malaysia’s regulatory watchdog – Securities Commission (SC) – will bring into effect the Capital Markets and Services Order 2019.

According to the notice released on Monday, Malaysia’s Securities Watchdog will have complete power to regulate cryptocurrency exchanges and other digital asset offerings. The notice reads:

“With the coming into force of the Prescription Order, the offering of digital assets, as well as its associated activities, will require authorization from the SC and compliance with relevant securities laws and regulations. “

The latest introduction of regulatory measures is a step in bringing clean practices and best practices “in price discovery, trading rules and client asset protection”. Furthermore, businesses dealing in crypto assets will have to ensure cybersecurity, anti-money laundering and counter-terrorism financing (AML / CFT) rules.

Unauthorized Practices Can Draw Huge Penalties

Malaysia’s Minister of Finance, Lim Guan Eng, made it clear that any person indulging in launching unauthorized ICOs and other activities shall be subjected to stringent punishments. These punishments could draw fines around $2.4 million (RM 10 million) or even a 10-year jail term.

In the official statement, the Finance Minister said:

“The Ministry of Finance (MOF) views digital assets, as well as its underlying blockchain technologies, as having the potential to bring about innovation in both old and new industries.

In particular, we believe digital assets have a role to play as an alternative fundraising avenue for entrepreneurs and new businesses, and an alternate asset class for investors.”

The Finance Minister also said that the Commission is due to launch a framework by the end of Q1 this year. It will also establish “the relevant regulatory requirements for the issuance of ICOs and the trading of digital assets at digital asset exchanges in Malaysia”.

Over the last two months, the Malaysian financial regulators have been working with its central bank for establishing regulations to governing the cryptocurrency market. After the long-going uncertainty over the legality of crypto assets, it looks like the Malaysian authorities have finally arrived with a structured approach to deal with the digital currency market.

Asian Countries Taking Firm Regulatory Measures on ICOs

Alike Malaysia, other Asian countries like the Singapore and South Korea have issued new guidelines for regulating the ICO market. Last month in December 2018, the crypto-friendly country nation Singapore updated its ICO guidelines. Under its new rules, cryptocurrency businesses need to abide by strict anti-money laundering and counter-terror-financing rules.

Singapore mandates that all participants involved in “must be approved by MAS as an approved exchange or recognized by MAS as a market operator under the SFA”.

Similarly, South Korean lawmakers proposed to legalize ICOs last year. Min Byung-doo, a Democratic Party lawmaker said: We are looking at ways to open up the road to ICO[s] while strictly prohibiting negative factors such as fraud, speculation and money laundering.”

Malaysia’s Securities Watchdog Imposes Severe Legislation on Cryptos and ICOs Today

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