Cryptocurrency Regulations Malaysia 2024
Cryptocurrency adoption is increasing globally, and Malaysia is following suit. Although digital assets are not recognized as legal tender in the country, they are classified as securities. Malaysia has been actively developing a comprehensive legal framework for digital assets and their service providers.
We have crafted a thorough guide to Malaysian cryptocurrency regulations. In this guide, you will discover the regulatory bodies governing the industry and the essential criteria for service providers to operate lawfully within the country.
Malaysia’s Prescription Order 2019 categorizes digital assets into two distinct categories:
Digital currency:
- Defined as a digital representation of value.
- Recorded on a distributed digital ledger, whether cryptographically secured or not.
- Functions as a medium of exchange and is interchangeable with any money.
- Transactions can involve crediting or debiting of an account.
Digital tokens:
- Also a digital representation recorded on a distributed digital ledger.
- May be cryptographically secured or not.
- Unlike digital currency, digital tokens may not necessarily function as a medium of exchange, but their function isn’t limited to this.
The document outlines criteria for when digital currencies and digital tokens are considered securities:
Securities status is determined based on specific conditions outlined in the Order.
It’s not explicitly mentioned in the provided content what these conditions are, but typically, securities status might depend on factors such as the nature of the offering, the rights associated with the digital asset, and the expectations of profits from the investment. Therefore, digital currencies and tokens meeting these conditions would be subject to relevant regulations governing securities.
Businesses aiming to operate in Malaysia must clarify whether they engage with digital tokens or digital currencies. Depending on this distinction, they categorize into one of the following groups:
- Recognized Market Operator for Digital Asset Exchanges (RMO-DAX): An electronic platform facilitating digital asset trading.
- Digital Asset Custodian (DAC): Provides custody services for digital assets, safeguarding investors’ digital assets.
- Initial Exchanges Offering (IEO): Provides an alternative fundraising channel for innovative businesses through digital tokens.
Interested in learning more about cryptocurrency regulations in Malaysia? Dive into our comprehensive guide where we break down the latest rules and regulations governing the industry.
