As per the latest news reports from Malaysia, it has been revealed that the government is bringing digital assets and coins under the jurisdiction of the national capital markets regulatory body, the Malaysian Securities Commission, by declaring them as securities. The newly formed legislation called The Capital Market and Services Order 2019 will come into effect from January 15, 2019, as revealed by the Minister of Finance, Lim Guan Eng.
Interestingly, like various other countries around the world, the South-East Asian nation had also been considering the formulation of regulations surrounding digital assets for some time now. However, Malaysia seems to have taken a leap by formulating The Capital Market and Services Order 2019.
As per the new legislation (which is effective from today) any person or entity indulging in unregistered or illegal token projects or coin offerings will be subject to a penalty of USD 2.5 million and punishment in jail for up to 10 years.
One may view the passing of this legislation as a harsh step against the state of digital currencies in Malaysia. However, the Ministry of Finance has clarified that the move to crack down on illegal ICO’s does not mean that the nation is against cryptocurrencies. The popular Malaysian news publication The Star elaborated by saying,
“The Ministry of Finance views digital assets, as well as its underlying blockchain technologies, as having the potential to bring about innovation in both old and new industries.”
To conclude, even though the Finance Minister is of the view that digital tokens and Initial Coin Offerings are a viable alternative to raising capital, however, the new legislation appears to be strict. Loose regulations had meant that the Blockchain industry had prospered in Malaysia in the past few years. With authority now in the hands of the of the Malaysian Securities Commission, the future of cryptos and Blockchain in the nation remains unclear.