Kuala Lumpur, MALAYSIA – As of today, the Malaysian government has officially begun regulating initial coin offerings (ICOs) and cryptocurrency trading.
According to a statement from the Malaysian Security Commission, the guidelines will 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 statement followed the press release which was shared on the Ministry of Finance’s official Twitter account:
PENGUATKUASAAN PERINTAH MENETAPKAN ASET DIGITAL SEBAGAI SEKURITI BERMULA ESOK pic.twitter.com/plG33Q1v3H
— Ministry of Finance (@MOFmalaysia) January 14, 2019
“With the coming into force of the Prescription Order, the offering of digital assets, as well as its associated activities, will require authorisation from the SC and compliance with relevant securities laws and regulations.”
Finance Minister Lim Guan Eng has released a statement saying that any individual found launching an unauthorized ICOs or participating in the exchange of digital goods could result in a daunting 10-year jail term and a RM10 million (US$2.4 million) fine.
In his 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.”
In order to implement the regulatory framework on digital assets, the SC and BNM will enter into coordination arrangements to ensure compliance with laws and regulations under the purview of both regulators. The relevant regulatory framework is expected to be launched by end-Q1 2019.
The commission is expected to launch a regulatory framework by end of Q1 2019, putting in place “the relevant regulatory requirements for the issuance of ICOs and the trading of digital assets at digital asset exchanges in Malaysia”.
As of now there is still no indication that the announcement is retroactive in regards to already established local exchanges and Malaysian launched ICO projects.