Regulators in Malaysia have released an amended set of rules for businesses engaged in trading Bitcoin and other cryptocurrencies. This move comes as part of the government’s efforts to regulate the industry with laws for initial coin offerings (ICOs) expected later in the year.
REGISTRATION REQUIREMENTS FOR BITCOIN EXCHANGES
Malaysia’s Securities Commission (SC) on Thursday (January 31, 2019) announced amendments to its Guidelines on Recognized Markets, introducing regulations for cryptocurrency exchange platforms. The country’s financial regulatory watchdog said that platforms looking to operate in the country have until March 1, 2019 to register with the SC.
As part of the amended guidelines, Bitcoin exchanges must conform to a corporate organizational structure. Top executives of such businesses must also have a clean criminal record, in addition to possessing demonstrable experience in trading markets.
According to the newly released guidelines, platforms must also show proof of robust security measures to protect investor funds. The SC says it will only approve registration of cryptocurrency exchanges that are capable of contributing to the country’s emerging digital economy.
EMBARGO ON NEW ACCOUNT OPENINGS
With the newly amended guidelines released by the SC, bitcoin exchanges in the country are now in a transitional period. During this time, platforms cannot open new trading accounts for customers.
Commenting on the need for cryptocurrency trading rules, Datuk Syed Zaid Albar, the head of the Malaysian Securities Commission, said:
"The new framework is part of the SC’s efforts to promote innovation while ensuring investor protection in the trading of digital assets."
ICO REGULATORY FRAMEWORK STILL IN THE WORKS
Back in November 2018, Guan Eng, the country’s Finance Minister hinted that regulations for bitcoin exchanges and ICOs would emerge before the end of Q1 2019. However, the recent guidelines by the SC do not contain any rules for ICOs.
In a media briefing held earlier in January 2019, regulators said Malaysia’s ICO laws could include regulations covering investment thresholds and standards for white papers. According to the SC, white papers for cryptocurrency investment projects would conform to the same standards as IPO prospectuses.
Clear-cut regulations for Malaysia have been a long time in coming following. In November 2018, Muhammad Ibrahim, the Governor of the country’s apex bank said the country needed robust auditing and reporting measures for the emerging asset class.
Malaysia joins other countries in Southeast Asia in developing a regulatory framework for virtual assets. In 2018, Thailand released detailed regulations for ICOs and cryptocurrency exchange platforms and granted licenses to four exchanges last month.
