The Malaysian government confirmed on Monday that its new cryptocurrency law will go into effect on January 15, according to reports from Reuters and local Malaysian news outlets. Finance Minister Lim Guan Eng is reported to have confirmed the news, mere days after Federal Territories Minister Khalid Abdul Samad told reporters that the government had not yet decided cryptocurrency’s legal status in the country.
Reports indicate that the new law, Capital Markets and Services Order 2019, will define digital currencies, tokens, and assets as securities subject to Securities Commission (SC) regulation. As a result, tokens and all related activities will need to be approved by the commission and comply with the country’s relevant securities laws and regulations.
Minister Lim suggested that digital currency’s prospects for innovation and fundraising played a role in the government’s decision to move forward with regulation. According to Malaysia’s The Star news outlet, Lim said:
“The Ministry of Finance (MOF) views digital assets, as well as its underlying blockchain technologies, as having the potential to bring about innovation in both old and new industries.
In particular, we believe digital assets have a role to play as an alternative fundraising avenue for entrepreneurs and new businesses, and an alternate asset class for investors.”
Lim also said that a regulatory framework to oversee digital assets should be implemented within next three months and will include regulator requirements for issuing initial coin offerings (ICOs) and digital currency exchange trading. He also noted that failing to seek the Securities Commission’s approval could carry a heavy penalty:
“Any person offering an ICO or operating a digital asset exchange without SC’s approval may be punished, on conviction, with imprisonment not exceeding 10 years and fine not exceeding RM10mil.”