Who regulates crypto in Malaysia
The Securities Commission Malaysia (SC) regulates digital assets as capital market products. Bank Negara Malaysia (BNM) and the SC have jointly said the SC has prescribed digital assets as securities.
The legal basis is the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019, which took effect on 15 January 2019. The SC says the Order lets it set guidelines for offering and trading digital assets.
BNM and the SC have also said digital assets are not legal tender in Malaysia. This means no one has to accept them as payment for goods or services.
BNM oversees payment systems. It does not regulate digital assets as a payment instrument, and has said private cryptocurrencies are not suitable as general payment tools because of price swings and cyber threats.
What has to be registered
A platform for trading digital assets is called a digital asset exchange, or DAX. In Malaysia a DAX must be registered with the SC as a Recognized Market Operator.
The SC framework also covers digital asset custodians, which keep investors' digital assets safe, and initial exchange offerings, a way for businesses to raise funds through digital tokens.
The SC has said that operating a DAX without its authorisation is an offence under securities laws. The penalty can be a fine, up to ten years in prison, or both.
When the SC registered its first exchanges in 2019, it said operators that were not approved had to stop all activities immediately and return investors' money and assets.
Risks the regulators point out
The SC has said a platform calling itself an "exchange" is not necessarily authorised by the SC.
It has also noted that issuers based overseas can be hard to verify, and that getting money back may fall under foreign law. Hacking and other cyber threats are another risk it lists.
The SC Investor Alert List page says that people who deal with unauthorised entities are not protected under Malaysian securities laws.
How to check a crypto platform is licensed
Open the SC digital assets page at sc.com.my/digital-assets. It lists the registered DAX operators, digital asset custodians and IEO operators. The SC also keeps a list of registered digital asset exchanges, which it says is updated regularly.
Search the platform's company name and website in the SC Investment Checker at sc.com.my/investment-checker. Results include SC Investor Alert List entries marked "Unauthorised".
Check the SC Investor Alert List at sc.com.my/investor-alert-list and BNM's Financial Consumer Alert List at bnm.gov.my. BNM says an entity's absence from its list does not confirm that it is licensed.
SmartChecker shows register records and reviews for the companies it lists, so you can compare what a platform says about itself with the official records.
Common questions
Is crypto legal tender in Malaysia? No. BNM and the SC have said digital assets are not legal tender, so no one is required to accept them as payment.
Does BNM regulate crypto exchanges? No. The SC regulates digital asset exchanges. BNM does not regulate digital assets as a payment instrument.
Can an unregistered crypto exchange operate in Malaysia? The SC says running a DAX without its authorisation is an offence under securities laws.
Who can I contact with questions? The SC line for queries and complaints is 03-6204 8999. BNM's BNMLINK contact centre is on 1-300-88-5465.