From Securities Commission Malaysia
We refer to the article published by FMT on July 6, titled “Expert calls for interagency, intergovernmental cooperation to regulate crypto industry“.
The discussions highlighted in the article concerning Malaysia’s regulatory approach to digital assets have brought forth various perspectives, including calls for greater interagency and intergovernmental collaboration.
The Securities Commission Malaysia (SC) wishes to clarify certain perceptions to ensure a more accurate understanding of Malaysia’s existing regulatory framework and our ongoing efforts.
A collaborative regulatory approach
A common perception is that the regulation of cryptocurrencies in Malaysia falls solely under the purview of the SC.
The regulators, Bank Negara Malaysia (BNM) and the SC, issued a joint statement in 2018, clarifying their respective scopes. BNM oversees the use of digital assets as a means of payment, while the SC oversees digital assets prescribed as securities and regulates digital asset exchanges (DAX).
Both the SC and BNM jointly oversee the implementation of anti-money laundering laws and safeguard the nation’s financial stability. This coordinated arrangement to oversee digital asset activities aims to balance innovation with systemic risk management, financial integrity and investor protection.
This is particularly important in light of high-profile scandals like the FTX and Terra Luna, which have highlighted risks and underscored the need for stronger oversight in the crypto market.
This coordinated approach ensures various facets of the digital asset ecosystem are addressed by the relevant bodies.
Comprehensive regulatory framework
The notion that there is a “lack of comprehensive regulations” often arises. However, Malaysia has been among the early movers in developing a regulatory framework for digital assets.
The existing regulatory regime extends beyond guidelines and regulations to include robust ongoing supervision and enforcement mechanisms. This involves the SC actively monitoring the market to ensure compliance, safeguarding market integrity, and ensuring proper conduct among regulated entities through continuous surveillance.
We note the views expressed by experts on the need for comprehensive regulations. From a regulatory perspective, we recognise that the industry is rapidly evolving, with new technologies and products constantly emerging. Our ongoing efforts serve to ensure that the regulatory framework remains robust, adaptive and responsive to these developments.
The SC actively ensures that Malaysia’s regulatory framework is aligned with recommendations from international fora such as the International Organization of Securities Commissions (IOSCO) and the Financial Action Task Force (FATF).
This commitment ensures that Malaysia’s regulatory approach evolves in line with global standards, particularly concerning investor protection, market integrity and combating financial crimes.
Clarifying ‘banning’ vs ‘not legal tender’
People often confuse “banning digital assets” with “not recognising them as legal tender”.
In Malaysia, cryptocurrencies are not legal tender, which means they are not officially accepted as payment, and businesses are not obligated to accept them. This is mainly because cryptocurrencies can be unstable in value and can have other risks, such as fraud, flawed tokenomics, security and more.
However, not being legal tender is not equivalent to a ban. Digital assets are regulated as securities when they meet the criteria of being digital tokens and digital currencies, allowing for legitimate trading on SC-approved digital asset exchanges.
The SC’s focus has been on enabling responsible access to digital assets, allowing Malaysians to access this new asset class within established regulatory frameworks to ensure investor protection.
In fact, total digital asset trading value on regulated DAXs in 2024 accounted for 1.1% of the total equities trading on Bursa Malaysia, reflecting a growing but still relatively small market segment.
To strengthen the competitiveness of the digital asset market in Malaysia, the SC has issued a consultation paper on the proposed amendments for the liberalisation of token listing on DAXs and the strengthening of requirements for investor protection.
In addition, the SC is promoting greater innovation on the tokenisation of capital market products, allowing traditional markets to tap into the technology powering crypto assets globally.
In line with this, the SC has issued a consultation paper on the proposed regulatory framework for offering and dealing in tokenised capital.
Concerted efforts in tackling unregulated, illicit activities/digital scams
The call for strong collaboration between government agencies and international bodies to combat financial crimes linked to cryptocurrencies is not a novel concept, but a crucial ongoing imperative.
Efforts to tackle financial crimes and cybercrime already involve inter-agency cooperation, and these mechanisms are continuously being adapted and strengthened to address the unique challenges posed by digital assets.
The SC works closely with agencies like BNM, the police, and the Malaysian Communications and Multimedia Commission (MCMC) to combat illicit digital asset activities such as scams, money laundering, and unlicensed operations.
Unauthorised digital asset services are treated with the same seriousness as illegal traditional securities activities. The SC’s enforcement actions in this space include issuing cease-and-desist orders, blocking websites, and listing unlicensed platforms on its Investor Alert List.
As of June 2025, 111 unregulated entities were listed, 26 cease-and-desist orders were issued, and enforcement actions were taken against four entities.
Continuous evolution of digital assets
In conclusion, Malaysia’s approach to digital asset regulation is a dynamic and evolving one, characterised by a collaborative effort between key regulatory bodies, a commitment to international standards, and a nuanced understanding of the unique nature of digital assets.
While challenges remain, the existing framework provides a foundation for responsible innovation and robust oversight.
The Securities Commission Malaysia is the statutory body responsible for regulating and developing the capital market in Malaysia.
