Government opinion, Regulations, Top stories

Malaysia takes a soft approach with new crypto regulations

On Feb 27th, 2018, bank Negara of Malaysia issued an anti-money laundering and counter financing of terrorism policy for cryptocurrencies. The crypto regulations require the country’s virtual currency trading to adhere to the, know your client (KYC) requirements. Additionally, the provisions include guidelines on ID documentation. The move is aimed at increasing transparency in cryptocurrency activities in the country.

The policy has now gone into full effect and aims to ensure that these effective measures prevent the wild spread money laundering and terrorist financing risks that are “feared” by governments in cryptocurrency trade.  In the document, all cryptocurrency exchanges are required to collect accurate customer information, after establishing a business contract. This will also apply in case of suspicion regarding money laundering or the financing of terrorist activities.

The customer information required for cryptocurrency trading under the new regulation requires usage of ID, full names, address, and date of birth.  Also, the regulation states that any individual offering exchange services; from fiat to cryptocurrency or from cryptocurrency to fiat, should adhere to the anti-money laundering and anti-terrorism financing, including unlawful activities Act of 2001.

However, participants from the digital currency community complained about the obligations imposed on them. Consequently, the bank reiterated that these regulations do not connote the endorsement, licensing or validation by the bank of any digital currency entities. Also, it added that digital currency trade is not legally recognised in Malaysia, thus not covered by relevant conduct standards applicable to financial institutions.

This regulation is however not as strict as many had expected and shows that the central bank is keeping an open mind in the innovative technologies being introduced in the financial sector. Also, it is a clear indication that virtual currencies like Bitcoin, Ethereum and Litecoin are increasingly showing signs of a bright future in the country.

Do you think these new crypto regulations will bring some confidence to the crypto community in Malaysia and result to lead to mainstream adoption?

Let us know what your take is on this by sharing your views in the comment section below.

coinmag

Having contributed to many leading financial blogs, Ken's love for cryptocurrencies and the blockchain technology has him on high alert on all price developments within the cryptocurrency sphere.

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