According to Reuters, Malaysia is poised to introduce a regulatory framework for cryptocurrencies. The respective announcement was made by finance minister Lim Guan Eng on Jan. 14.
Regulatory oversight of crypto assets
The finance minister emphasizes the need for relevant regulatory requirements that would tame the ‘wild west’ of ICOs and crypto trading. An order that will recognize digital tokens as securities will be brought into force on Jan. 15. Those who operate unauthorized ICOs could face up to 10 years in prison.
The ICO space is extremely speculative given that more than 70 percent of coin offerings fail to exceed their initial valuation. Hence, many countries are stepping up their regulatory game. By introducing such rules, Malaysia is making an effort to protect local investors.
Differentiating between securities and utilities is yet another pain point, according to Circle CEO Jeremy Allaire. Earlier, the US SEC concluded that Bitcoin and Ethereum are not securities, but the cloud of uncertainty is hovering above many other digital assets in the likes of XRP.
A long path to legal clarity
Earlier, U.Today revealed that the Securities Commission (SC) was going to enact new cryptocurrency regulations by Q1 2019. Malaysia started regulating cryptocurrencies back in Q4 2017, making only baby steps in that direction. However, now it seems that the country is hell-bent on bringing legal clarity to the burgeoning sector.
Back in November, MP Fahmi Fadzil expressed his concerns about the anonymous nature of crypto on the cusp of launching the Harapan Coin (the first Blockchain-based political fundraising platform). He claimed proper regulatory guidelines were needed for its deployment.