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Malaysia will be putting into effect the laws on digital currencies from January 15, Tuesday. As per the laws, any person involved in operating unauthorized Initial Coin Offerings [ICOs] or any digital asset exchange will face a 10-year jail term and will have to pay RM 10 million in fine.
This announcement was made by the Malaysian Finance Minister, Lim Guan Eng, on January 14 after the Capital Markets and Services [Prescription of Securities] [Digital Currency and Digital Token] Order 2019. The Finance Minister also said that the framework will be in place by the end of the first quarter of 2019.
The rules for the digital currencies will term the currencies and digital tokens or digital asset as securities and will be controlled by the Securities Commission [SC]. Lim made it clear that these assets and cryptocurrencies will have to be approved by the SC and will have to comply with the relevant laws and regulations to be termed as securities. 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.”
He also added:
“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 informed that the SC will be putting regulatory requirements for the issuance of ICOs and trading of digital assets at digital asset exchanges in Malaysia. Lim said:
“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,” he said.
The Finance Minister duly noted that it believes that digital assets not only offer an alternative fundraising method, but also a new asset class for investors. As per the reports from Cointelegraph, the Malaysian government was indecisive until a few days back about whether to legalize cryptocurrencies. However, the government has laid down regulations for cryptocurrencies which will be in effect from tomorrow.