The Securities Commission Malaysia (‘SC’) has shed further light on digital assets.
It has been reported in three local English language newspapers on 23 January 2019 that companies engaging in digital assets have been given up to 25 January 2019 to identify themselves to the SC. This requirement applies even to companies that no longer wish to continue their digital assets business. Enforcement action for breach of securities laws could be initiated by the SC against those who fail to identify themselves.
Operators who identify themselves to the SC are required to inform the SC whether they wish to continue business (in which event they will be subject to conditions imposed by the SC) or to wind down their business.
The SC added that companies that no longer wish to be in the digital assets business but are holding money, crypto assets or digital assets are required to return them to their clients.
According to its representative, the SC recognises digital assets as an alternative fundraising avenue although they are high-risk investments. The representative disclosed that the ICO guidelines to be launched by end-March 2019 will be geared towards a disclosure-based regime and hinted that there could be a threshold for investors. It has also been reported that the guidelines for ICOs and digital exchanges will be similar to other global digital asset exchanges.
The SC also commented that the standard of white papers that have been issued in Malaysia are of low quality.
Apart from the media reports on 23 January 2019, the SC has thus far issued two media releases on digital assets and digital exchanges on 14 January 2019
and 17 January 2019