Malaysia registers three digital asset exchanges

Securities Commission Malaysia building.

The Securities Commission (SC) Malaysia on Tuesday announced that it has registered three recognised market operators to establish and operate digital asset exchanges (DAX) in the country.

The three approved exchanges – Luno Malaysia Sdn Bhd, SINEGY Technologies (M) Sdn Bhd and Tokenize Technology (M) Sdn Bhd – will be given up to nine months to comply with all regulatory requirements.

The announcement follows the coming into force of the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019 on January 15 and the subsequent issuance of the revised Guidelines on Recognised Markets this January 31 to introduce new requirements for DAX operators.

“DAX operators who have not been approved by the SC are required to cease all activities immediately and return all monies and assets collected from investors. Operating a DAX without authorisation from the SC is an offence under securities laws, and a person in breach may be liable to a fine or imprisonment term or both,” said the regulator.

In April, SC Malaysia had entered into coordinating arrangements with the country’s central bank – Bank Negara Malaysia, to facilitate industry innovation, fundraising activities for early-stage companies and trading of digital assets. The arrangement will also support the oversight of digital asset activities and ensure that systemic risk and financial integrity measures remain effective.

Last month, SC Malaysia had announced eight new recognised market operators, including three equity crowdfunding (ECF) and five peer-to-peer (P2P) financial platforms, which are expected to be operational by the end of 2019.

The newly registered ECF platform operators are 1337 Ventures, Ethis Ventures, and MyStartr while the new P2P platform operators are CapitalBay, MoneySave, CapSphere, Crowd Sense and MicroLeap. The first batch of ECF licenses was given out to six platform operators in 2015, making Malaysia the first country in Asia to legislate ECF.

The SC also recently released a new property crowdfunding framework following amendments made to its Guidelines on Recognised Markets, pursuant to an initiative announced in Budget 2019 by Lim last November.