DIGITAL currencies and digital tokens will be prescribed as securities and regulated by the Securities Commission starting tomorrow, said Finance Minister Lim Guan Eng.

The offering of such instruments, as well as its associated activities, will require authorisation from the SC and compliance with the relevant securities laws and regulations, he said in a statement today.

The securities will be regulated under the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019.

“The Finance Ministry views digital assets, as well as its underlying blockchain technologies, as having the potential to bring about innovation in both old and new industries,” Lim said.

Lim said the SC will put in place the relevant regulatory requirements for the issuance of initial coin offerings (ICOs) and the trading of digital assets at digital asset exchanges in Malaysia.

This framework is expected to be launched by the end of the first quarter this year.

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 RM10 million, he said.

The minister’s announcement follows moves by the SC and Bank Negara Malaysia who reported last month that new regulations on digital assets were being developed.

In a joint press statement, SC said ICO issuers would also be subject to the commission’s guidelines on Prevention of Money Laundering and Terrorism Financing, while Bank Negara reiterated that digital assets are not legal tender in Malaysia.

the malaysian insight