Malaysian Government to Introduce Regulatory Framework for Cryptocurrencies
After China and South Korea started cracking down on cryptocurrencies and altcoin exchanges, a new report states that the Malaysian government is preparing a regulatory framework for cryptocurrencies.
More Cryptocurrency Regulations
A few months ago, news emerged that the Chinese regulatory body imposed bans and regulations regarding cryptocurrency activities. The ban mainly focused on Initial Coin Offerings or ICOs, because regulators feared that some of them may have been fraudulent. Regulators demanded that the token sale operators refund their investors and immediately cease activities until further notice.
Shortly after the Chinese financial regulatory body banned ICOs, South Korea’s Financial Services Commission declared a country-wide ban on all ICOs and token sales. Some experts believe that the bans were appropriate so regulators can better understand the ICO market and its mechanism. The Chinese government regulators also warned certain Bitcoin and cryptocurrencies exchanges to close down their operations until proper regulatory mechanisms are properly installed. Regulators do not only want to protect consumers but they also want to stop money laundering and terrorist financing operations with appropriate KYC/AML procedures.
Malaysia’s Regulatory Framework
Recently, an article by Reuters suggested that Malaysia is also planning to introduce its own regulatory framework for cryptocurrencies. Governor Muhammad Ibrahim stated in a financial summit that through the new regulatory framework, individuals that convert cryptocurrencies into fiat money will be declared “reporting institutions”. This would require financial institutions to properly audit each exchange from cryptocurrencies to fiat, in order to appropriately detect any illegal activities.
This is to prevent the abuse of the system for criminal and unlawful activities and ensuring the stability and integrity of the financial system,
He also added:
Any information that we have that is relevant to the security of our friends in the region, we will share. My expectation is that will be reciprocated,
Malaysian regulators fear that cryptocurrencies may be used to finance terrorism-related groups and its operations. There have been previous incidents were terroristic groups used bank transfers to finance their illegal activities.
What are your thoughts on Malaysia’s upcoming regulatory framework for cryptocurrencies? Do you think that cryptocurrency users may benefit and be protected by the framework? Let us know in the comments below!
Images courtesy of Pixabay, The Malaysian Reserve