Securities Commission Announces Interim Measures for Digital Platforms and Initial Coin Offerings

17 January 2019

The Securities Commission Malaysia (‘SC’) has issued a media statement today to outline the interim measures with regard to operators of existing digital asset platforms and initial coin offerings (‘ICOs’) pending the implementation of the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019 which came into effect on 15 January 2019.

Existing Digital Platforms

The SC has engaged with existing digital asset platform operators today and arrangements have been put in place to facilitate the operation of existing platforms for a transitional period until 1 March 2019, subject to the fulfilment of the conditions specified by the SC.  During this period, these platform operators are not permitted to accept new investors and may only facilitate the withdrawal or transfer of client assets with the written instruction of the investor.

Existing platform operators who did not attend the engagement with the SC earlier today are to contact the SC on or before 25 January 2019, failing which they will be deemed to be operating a market in breach of the securities laws.

Upon the issue of the relevant guidelines, existing platform operators will be required to apply to the SC for authorisation if they intend to operate beyond the transitional period.

Prospective operators may also apply to the SC for authorisation once the guidelines are issued.

Initial Coin Offerings

No person shall conduct ICOs without the prior authorisation of the SC.  In this regard, the guidelines for ICOs will be issued by the end of Q1/19. In the meantime, ongoing ICOs should cease all activities and return all monies or digital assets collected from investors.