Lim Guan Eng, Malaysia’s Finance Minister in a press release on January 14 said the Securities Commission (SC) of the Southeast Asian country will regulate the use of cryptocurrencies. The trade of these digital assets will also have to meet the SC’s guidelines before being offered on exchanges.
Imposing the Capital Markets and Services Order on January 15
The finance minister said Malaysia’s Securities Commission will impose the “Capital Markets and Services” order tomorrow. This is an order that prescribes digital currencies as well as digital tokens as “Securities”. It also seeks to impose regulations that will govern their use and trade in the country.
Therefore, an individual or company who intends to run an Initial Coin Offering (ICO) or exchange these tokens will have to receive authorization from the financial regulators of the country. In the same vein, failure to comply with the SC’s requirements will reportedly lead to a 10-year jail sentence and a fine of 10 million ringgit ($2.4 million).
Ministry of Finance Believes in Blockchain’s Potential
Lim Guan Eng, on the other hand, said the Ministry of Finance is of the opinion that the Blockchain and virtual assets can lead to an innovation in new and old industries. He also added that digital assets can serve as a fundraising alternative to new businesses and entrepreneurs.
On November 26, BTCNN reported that the Minister stated that the Central bank of the country has the final say in cryptocurrency. Later on January 12, it was revealed that the Malaysian government is undecided if virtual currencies should be legalized in the country or not. At that time, Khalid Abdul Samad, the Malaysian federal territories minister said the situation is still unclear thus, the country could not classify these assets
Malaysia Says Cryptocurrencies are Not Legal nor Illegal
The Southeast Asian country, in the past, has been known to be more receptive of Blockchain and Cryptocurrencies. But now, stringent rules will be enforced even though it is in a bid to protect investors. This is a country which BTCNN reported on November 22 to have used Blockchain to aid in the traceability of diploma certificates in order to eliminate fake ones.
In a similar event, the U.S. Securities and Exchange Commission recently released a report stating that they will be focused on the regulation of cryptocurrencies in 2019. The regulator said the financial market has grown rapidly and as such, it could pose potential risks to investors and the integrity of the U.S. market.