The decentralized economy has been taken advantage of by many industry players to circumvent national laws. But the Malaysian regulators seem to be having none of that.
The country’s financial markets regulator recently ordered all but three cryptocurrency exchanges in the country to shut down. In a release seen this week, the Securities Commission Malaysia announced that there are just three exchanges that have permission to operate within the country. These are Luno Malaysia, Tokenize technology and Sinegy Technologies.
Refund of Investors’ Deposits
The agency also ordered that all the other exchanges that have been operating in the country without relevant approval were to refund investors’ deposits. It also stated that the three approved exchanges have until March, next year to meet up with other regulatory demands that would enable them offer full exchange services in the country.
Some of the requirements demanded by the regulator from the exchanges whose licenses were approved last month are market surveillance, publishing and submission of trading rules, segregated bank accounts among others. The report said that with full compliance, the approved exchanges would be authorized to render full services in the country.
According to the statement,
“Apart from the three operators mentioned above, no other online platforms are permitted to establish and operate a DAX in Malaysia currently. As such, all other DAX operators are required to immediately cease all activities related to the trading of digital assets and return all monies and assets collected from investors.”
The statement from the SC said that compliance to the regulatory framework was an integral part of the agency’s action plan for the industry, noting that the policy towards cryptocurrencies extends to initial coin offerings.
A Warning On ICO
The agency used the channel to warn Malaysians not to participate in ICOs, especially those hosted outside the country. It highlighted that it is difficult to make proper assessment of such initial coin offerings. The commission said that recoveries of investors’ funds in such instances are subject to foreign laws which make it difficult to actualize.
Malaysia is one of the crypto-friendly nations and the approved exchanges are expected to make gains. One of the reasons the country has been seen as a haven is the fact that crypto gains are not subject to capital gain tax.