Malaysia’s Securities Commission (Shariah Advisory Council) has announced that the trading of digital assets is now legal in the country. The Securities Commission is the regulatory authority that oversees the implementation of Islamic laws in the operations of Islamic financial institutions.
Datuk Syed Zaid, the Chairman of the Securities Commission, said that the regulator has resolved key issues facing regulations of digital currencies in a principled manner.
Big Crypto Gains
Malaysia has experienced exponential growth of interests in the crypto market but there have also been inside trading abuses, market manipulation, and some exchanges were even involved in predatory and deceptive practices. All these have led to the need to reposition the existing financial regulatory framework to incorporate the supervision of the crypto market in the country.
Datuk stated that the regulator has resolved that trading and investment of digital currencies and tokens are permissible in registered digital asset exchanges. He said that in a teleconference panel session at Invest Malaysia 2020 here today. He said: “This is a really ground-breaking resolution by SAC (Shariah Advisory Council) that could spur greater development and investment in digital assets.”
Datuk stated that the commission’s resolution has been finalized, and the agency would issue further details later.
The commission has currently allowed three digital asset exchanges (including Tokenize, SINEGY, and Luno) to operate in the country.
As per the report, the agency has approved at least four digital assets in the nation up until this month.
SINEGY is the first crypto exchange approved by Malaysia’s securities regulator. The founder of SINEGY, Kelvyn Chuah, termed the announcement as having extreme significance as more than 60% of Malaysians are Muslims. He said that the announcement has cleared several ambiguities associated with digital assets. Chuah is delighted by the announcement that the country has made. He revealed that Malaysia aims to become the hub of Islamic fintech and finance.
Chuah said that currently, all regulated trading activities of digital assets are allowed, but many non-compliant activities are not permitted. He said that the crypto industry in the country is closely waiting for the commission’s full guidelines on trading and issuance of digital assets. Chuah mentioned that crypto operators think that the regulatory authorities may consider creating a regulated digital asset derivatives market in the future.
As the Malaysian Muslim community is still awaiting a Shariah-compliant resolution for the trading of digital assets, crypto firms such as SINEGY now can explore potential services, which may welcome more Muslims into the digital asset space.
Malaysia Leading the Way in Crypto Regulation
The status of the cryptocurrency industry in the country had been unclear until the recent announcement by the Securities Commission. Crypto trading was not termed illegal but remained unregulated.
In February 2019, Securities Commission Malaysia (SC) announced that the nation would be implementing new regulations on the trading of digital assets and ICOs (initial coin offerings). Malaysia’s finance minister, Lim Guna, said that new regulations guiding cryptocurrency trading would assist in serving as criteria for exchange operators and coin issuers. That would also assist in ensuring standard practice in terms of trading, pricing, and asset protection.
The new regulations require any digital asset offering to get approval from the Securities Commission. Such offerings are also required to meet counter-terrorism financing and anti-money laundering rules. Any trader identified trying to bypass the law would be subjected to a fine up to US$2.4 million (RM10 million) or a prison sentence of up to 10 years. The country’s central bank and the Securities Commission said that new rules aim to help protect investors’ assets and create fair trading.