The laws imposed on the nascent market are a bit harsh as Lim Guan Eng, the Finance Minister of the country, revealed that the ministry has proposed a 10-year jail term or a fine of RM 10million ($2.4 million) for any person or entity launching unauthorized ICOs or participating in the exchange of digital goods.
Eng confirmed that the digital asset market would come under the watch of the Securities Commission Malaysia (SCM), the country’s existing financial market watchdog.
PENGUATKUASAAN PERINTAH MENETAPKAN ASET DIGITAL SEBAGAI SEKURITI BERMULA ESOK pic.twitter.com/plG33Q1v3H
— Ministry of Finance (@MOFmalaysia) January 14, 2019
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In his 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,” he added.
The SCM is expected to come up with a regulatory framework for the digital asset sector by the end of the first quarter of 2019. Eng said that these will be “the relevant regulatory requirements for the issuance of ICOs and the trading of digital assets at digital asset exchanges in Malaysia.”
Last month, the SEM and Bank Negara Malaysia (BNM), the country’s central bank, issued a joint statement providing some clarity on the regulatory authority under which the digital asset sector falls.
Though the BNM do not consider crypto as legal tender, the statement mentioned that “ICO issuers and digital asset exchanges which are involved in the issuance or dealing of digital assets with a payment function will need to comply with relevant BNM laws and regulations relating to payments and currency matters. In addition, ICO issuers and digital asset exchanges are subject to the SC’s Guidelines on Prevention of Money Laundering and Terrorism Financing.”