Malaysia’s Regulator Seeks Public Opinion, Proposes Easing Crypto listing Process

Malaysia’s Securities Commission (SC) is seeking public input on significant changes to its proposed amendments to its regulatory framework governing digital assets. The main idea is to make it easier for crypto exchanges to list certain digital assets, instead of needing special approval for each one.

Under the new rules, digital assets that meet specific requirements can be listed without extra permission. This will help new digital assets reach the market more quickly, making Malaysia’s digital asset scene more vibrant. Importantly, this puts more responsibility on the exchanges themselves.

Malaysia Proposes Rules for Listing Process

To ensure a basic level of safety and readiness, the proposed rules stipulate that listed digital assets must have undergone comprehensive security checks, the results of which must be publicly accessible.

Additionally, these assets must have been traded for at least a year on a platform that adheres to rules established by the Financial Action Task Force (FATF), indicating their general legitimacy and regulatory compliance.

Beyond this initial rule easing, the SC is also soliciting opinions on trading certain riskier asset types. These include privacy coins, such as Monero (XMR), designed for enhanced privacy.

The regulator seeks industry insights on managing the risks these assets present, particularly how they might facilitate circumvention of rules against money laundering and terrorist financing.

Similarly, the SC seeks feedback on whether it should be permissible to trade assets commonly referred to as memecoins. These are digital assets that often become popular because they connect with internet trends or popular culture.

Customer Protection Rule

The consultation addresses digital assets that many people hesitate to trade, including new utility tokens. Malaysia’s SC recognizes that these tokens, despite their potential new uses, present a higher risk due to underdeveloped markets and uncertain futures.

In addition to these proposed listing rule changes, the SC is thoroughly reviewing how digital asset exchanges must protect customer money and digital assets. The objective is to introduce stricter regulations to safeguard user assets. One significant proposed change requires the exchange to segregate user assets, thereby preventing the commingling of customer funds and digital assets with the exchange’s capital.

The SC’s proposal requires crypto exchanges that currently hold customer assets to either register as special digital asset custodians or use the services of a custodian already registered with the SC. Digital asset exchanges will also need to meet new minimum financial requirements.

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