Malaysia ICOs, Crypto Exchanges Placed Under Regulation Starting 2019

Nov 30, 2018 at 17:27

Malaysia’s Finance Ministry said initial coin offerings (ICOs) and cryptocurrency exchanges in the country will be regulated by 2019.

In his keynote address at the FinTech Conference 2018, Finance Minister Lim Guan Eng explained that the development is a recognition of cryptocurrencies as a means to raise capital and make investments.

Malaysia’s central bank, the Bank Negara Malaysia, and the Securities Commission will jointly be tasked to craft the regulatory framework.

“Both Bank Negara and the SC, in terms of formulating this framework, will be under the auspices of the Finance Ministry. The Finance Ministry will lead the committee comprising of Bank Negara, the SC, and the MOF itself,” the official was quoted in a report by The Star Online.

The new rules will take effect as early as within the first quarter of next year, the official added.

Guan Eng stated that the introduction of such policies signifies the government’s openness and intent to provide businesses a new way to raise their funds.

“We are keen on the continued development of such alternative financing avenues for these businesses beyond the traditional channels of financing,” he continued.

So far government has rolled out a so-called Co-investment Fund (CIF) which offers businesses as much as RM50 million worth of funds. The program was seen to mainly benefit micro, small and medium enterprises that can commit to be transparent with and accountable for the use of their funds.

The Finance Minister pointed out that although some are skeptical of the virtual currency industry, it was necessary to lay down regulations for crypto tools such as virtual currency exchanges and ICOs to safeguard the many investors involved in such schemes.

This noted skepticism extends to the Asian region where some countries like South Korea and China uphold rigorous policies to the point of shutting down exchanges or banning ICOs. Meanwhile, some countries like the Philippines and Japan have embraced the innovation, while still wary of the consequences of being lax in dealing with crypto business players.