Updates on the legality of cryptocurrency in Malaysia

On 19 September 2017, the Governor of Bank Negara Malaysia (BNM) announced at the Global Symposium on Development Financial Institutions that there will be a a guideline on cryptocurrency to be issued by year end.

It appears that the BNM is particularly concerned about the transparency and the players involved in the cryptocurrency scheme. The detailed news report can be read here.

Two weeks after that, Securities Commission (SC) issued a statement on Initial Coin Offering (ICO). In summary, the SC gave a stern warning to investors to be mindful of the potential risks involved in ICOs scheme. The full statement can be read here.

In restrospect, BNM had earlier announced 3 years ago that Bitcoin is not recognised as legal tender and it does not regulate the operations of Bitcoin. The announcement can be found here.

The potential ban of cryptocurrency by BNM would indirectly mean that ICO would also be deemed to be illegal. This will include the act of buying and selling of other form of cryptocurrency such as Bitcoin and Ethereum altogether.

Potential investors and companies seeking to raise funds through ICOs are advised to be careful when dealing with cryptocurrency given the speculative nature of the schemes.

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