Stringent ICO and Crypto Laws are on the Horizon for Malaysia, Possible Decade Long Jail Sentences
Changes to regulations in the cryptocurrency industry are abound throughout many countries, and it looks like Malaysia is one of the most recent to impose new laws. According to a report from TheNextWeb, the government in Malaysia has decided to impose regulations on both cryptocurrency trading and initial coin offerings (ICOs).
A statement was just issued by Lim Guan Eng, who is the Minister of Finance in Malaysia. He said that by taking part in the exchange of digital goods, or launching unauthorized ICOs, consumers put themselves at risk for being jailed for a decade and being assigned $2.4 million (RM 10 million) in fines. This order is scheduled to take effect on January 15th, and It will categorize digital currencies and tokens as securities.
The Securities Commission Malaysia will enforce the new regulations. Releasing a statement, the Finance Minister 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.”
Part of the compliance with the new laws will involve new anti-money laundering and counter-terrorism financing (AML/CFT) protocols. There will also be requirements involving “cyber security and business continuity measures.”
Still, according to a report from The Star Online, Lim noted,
“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.”
By the end of the first quarter, the framework should already be in place. This will set up “the relevant regulatory requirements for the issuance of ICOs and the trading of digital assets at digital asset exchanges in Malaysia,” according to the Minister.
In December, the central bank and the finance regulators in Malaysia told the public that they would be establishing regulations that govern digital assets. However, as recently as two days ago, the government was still uncertain if cryptocurrency would even be legalized within their jurisdiction. At that time, Khalid Abdul Samad, the territories minister of the country, said,
“People have asked me if [cryptocurrency and digital currency] are legal or illegal. At the moment, the answer is neither legal nor illegal as the situation is still unclear.”