Malaysia's securities regulator has introduced a new framework for operators of electronic trading platforms for digital assets such as cryptocurrencies and security tokens, including requiring them to have a minimum paid-up capital of 5m ringgit ($1.22m).
Under the revised guidelines, any person who is interested in operating a digital asset platform is required to apply to the Securities Commission Malaysia (SC) to be registered as a recognized market operator.
Operators that are publicly listed companies must have at least one independent director on their boards. Trading platforms must also be registered as a "recognised market operator" and the assets to be traded must be approved by Securities Commission Malaysia (SC) prior to listing.
The new framework is part of the SC's efforts to promote innovation while ensuring investor protection in the trading of digital assets"
Any person operating unauthorized initial coin offerings (ICOs) or digital asset exchanges in Malaysia will face a 10-year jail sentence and a 10m ringgit ($2.4m) fine. The regulator will be introducing a framework on initial coin offerings by the end of March.
"The new framework is part of the SC's efforts to promote innovation while ensuring investor protection in the trading of digital assets," said Datuk Syed Zaid Albar, SC Chairman. He added that while there is a framework to facilitate the trading of digital assets, investors are reminded to be mindful of the risks when dealing in digital assets such as sudden price fluctuations and liquidity risks.