Cryptocurrency News

The regulatory landscape of cryptocurrency in Malaysia: An overview


In 2019, the Malaysian government announced it was working on a regulatory framework for digital currencies. This framework will give investors and businesses legal certainty when using cryptocurrencies in Malaysia. The new regulations are aimed at protecting consumers from fraud and other criminal activities while still allowing innovation in the market. 

Furthermore, financial institutions such as banks can now legally accept cryptocurrency deposits under this framework. As a result of these changes, more people have become interested in investing in digital currency markets like Bitcoin, Ethereum, Ripple, and Litecoin. This has caused an increase in demand for crypto trading platforms based within Malaysia, which offer users greater security compared to overseas exchanges due to their regulation by the government. These platforms also allow users to benefit from lower fees than some international foreign exchange services providing another incentive to use them over traditional methods of exchanging money between countries or regions.

Malaysia also boasts a vibrant cryptocurrency exchange Malaysia scene with most major local exchanges, including Luno, SINEGY Technologies Sdn Bhd, Coinhako Inc., Tokenize Exchange Pte Ltd., Binance Labuan Limited, and KYS Global Market Maker Services. Although digital assets remain largely unregulated by national authorities, the Securities Commission Malaysia guides ICOs that may require registration or licensing depending on their nature. This allows for greater protection for investors while also providing incentives for innovation within the best crypto exchange Malaysia industry.

Importance of understanding the regulatory landscape for cryptocurrency in Malaysia

The Bank Negara Malaysia is still defining the legal status of the crypto exchange Malaysia. However, it has been suggested that cryptocurrencies can be used as a medium of a crypto exchange in Malaysia when certain conditions are met. These include anti-money laundering and terrorism financing measures, as well as the need for the Malaysia cryptocurrency exchange to register with the Securities Commission of Malaysia (SCM).

In addition, taxes may be imposed on any gains derived from cryptocurrency dealing. This means that investors might need to declare any profits from trading or exchanging digital currencies for Malaysian Ringgit. Malaysian authorities have also issued warnings about investing in ICOs or using initial coin offerings to raise funds via cryptocurrencies, as these activities may not be regulated under existing laws governing securities and capital markets.

Furthermore, several banks have decided against allowing their customers to purchase or trade cryptocurrency through their services due to a lack of legal clarity regarding its status in the country. This means those interested must look elsewhere for access points into this burgeoning financial asset class.

Regulatory Guidelines for Cryptocurrency in Malaysia

Guidelines issued by the Securities Commission Malaysia (SC) for initial coin offerings (ICOs) and digital asset exchanges (DAXs) came into effect on Jan 15. This set of guidelines is seen as a milestone for the Malaysia crypto exchange industry, as it provides clarity and legal certainty for those involved in ICOs or DAX transactions. The framework covers areas such as registration requirements, operational procedures, and KYC/AML compliance processes. 

Furthermore, the SC has also issued separate guidelines on digital currency investments, which will assist investors in better understanding the risks associated with investing in cryptocurrencies. With these new regulations in place for Malaysia-approved crypto exchange, companies dealing with cryptocurrencies can now operate without fear of potential legal actions from authorities or other third parties. It also creates an environment that allows users to trade more safely and securely while providing stronger consumer protection measures that support Malaysia’s vision of becoming a regional financial hub.

Guidelines issued by Bank Negara Malaysia (BNM) for cryptocurrency activities and transactions are very straightforward. Firstly, those trading or holding digital assets are required to adhere to the Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) Policy for Digital Assets. This includes KYC verification and other measures such as obtaining customer risk profiles, suspicious transaction reporting mechanisms, and record-keeping requirements. Secondly, BNM has prohibited all domestic entities from involvement in cryptocurrency-related activities, such as investing or providing services involving cryptocurrency exchanges, custodial wallets, and initial coin offerings (ICOs). Finally, any institution which BNM authorizes may still be involved in cryptocurrency activities but only with strict compliance with their license conditions issued by the regulator.

Challenges and Concerns with Cryptocurrency Regulation in Malaysia

Lack of clarity and consistency in regulatory guidelines has led to an increase in the number of businesses struggling to comply with local, state, and federal regulations. Many small businesses lack the resources necessary to understand what is required of them, leading to costly fines or even closures. Furthermore, uncertainty around which agency enforces specific rules can confuse business owners as they attempt to navigate the complex regulatory landscape. This further emphasizes the need for regulatory reform that makes it easier for small businesses and entrepreneurs alike to stay compliant with existing laws and regulations.

By introducing more rational and uniform guidelines across jurisdictions, regulators could help streamline compliance efforts while reducing administrative costs associated with understanding these frameworks. Ultimately this would give smaller companies lacking access to legal support systems a greater chance of success in today’s increasingly competitive global environment. For example, clearer disclosure requirements on consumer protection standards could give customers more confidence when purchasing goods or services from smaller firms without fear of exploitation or deception.

Future Outlook for Cryptocurrency Regulation in Malaysia

Potential developments and changes in the regulatory landscape for cryptocurrency in Malaysia remain unclear. The Securities Commission Malaysia (SCM) and Bank Negara Malaysia (BNM) have yet to issue official regulations or guidelines concerning cryptocurrency transactions and investment activities. Cryptocurrency exchanges operating in the country are currently subject to existing anti-money laundering and counter-terrorism financing laws, as well as a number of voluntary codes of conduct established by industry organizations such as ACCESS Malaysia. As cryptocurrencies become increasingly popular across the globe, both SCM and BNM will likely develop formal policies for their regulation within Malaysia’s borders. It is possible that these developments could limit some aspects of trading activities or impose new taxes on crypto transactions. However, until further notice from the two governing bodies, investors should exercise caution when engaging in digital currency investments within Malaysian jurisdiction.


The importance of ongoing monitoring and analysis of the regulatory landscape for cryptocurrency in Malaysia cannot be overstated. As the country builds a comprehensive regulatory framework, monitoring and analyzing changes to existing regulations is essential in helping cryptocurrency companies stay compliant with laws and regulations. By tracking developments at both regional and national levels, industry stakeholders can identify potential issues before they arise or take corrective action in response to evolving regulations. Such proactive steps help ensure that businesses remain compliant while allowing them to seize opportunities presented by new legislation. Furthermore, ongoing monitoring and analysis of the Malaysian regulatory landscape allow for better-informed decision-making regarding business strategy – enabling those operating within the space to gain a competitive edge by staying one step ahead of their rivals.

Jason Palmer

Jason Palmer joined CoinNewsSpan as an editor and analyst. He has over five years of experience as a forex analyst. He holds a master's degree in business administration with specialization in finance. He is actively involved in analyzing the prevalent crypto trends. He has a keen interest in commodities and forex trading.

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