Bank Negara Malaysia Seeks Public Feedback on Cryptocurrency Regulation
The rapid development and adoption of cryptocurrencies have driven regulators from around the globe to adopt various approaches and regulatory measures and Malaysia is no exception.
Following the announcement by Bank Negara Malaysia Governor, Tan Sri Muhammad Ibrahim in late November, Bank Negara Malaysia has issued for public consultation for digital currency exchanges as reporting institutions under the "Anti Money Laundering, Anti Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA)
This was done with the specific aim to ensure that effective measures are in place against money laundering/ terrorist financing risks associated with the use of cryptocurrencies and to increase the transparency of digital currencies activities in Malaysia.
Though the paper was issued for public consultation, it is also made clear that Bank Negara Malaysia still does not recognize cryptocurrencies as a legal tender and that the general public should still conduct their own due diligence when dealing with cryptocurrencies as there is no formal mechanism for legal redress.
The paper proposes that for cryptocurrency exchanges to comply to reporting obligations and risk assessments relating to anti-money laundering and counter-terrorism financing laws that are not dissimilar to the ones that financial institutions in Malaysia are currently complying with. When in effect, the paper also proposes that cryptocurrency exchanges that carry out activities in Malaysia that are not necessarily located in Malaysia to be subjected to the same requirements.
Currently, Bank Negara Malaysia still welcomes feedback from the general public and all submissions must be made by 12 January 2018. More info on the paper can be found here