SC registers three digital asset exchanges

• Luno, Sinegy, Tokenize have nine months to meet regulatory requirements
• DAXes operating without approval is an offence under securities laws 

THE Securities Commission Malaysia (SC) announced on June 4 that it has registered three Recognised Market Operators (RMOs) to establish and operate digital asset exchanges (DAX) in Malaysia. These exchanges facilitate the trading of digital coins and tokens such as Bitcoin and Ethereum.

The three registered DAX operators are: Luno Malaysia Sdn Bhd (headquartered in London), SINEGY Technologies (M) Sdn Bhd and Singapore-based Tokenize Technology (M) Sdn Bhd.

They’re not instantly approved to operate in Malaysia just yet. The SC has given them up to nine months to fully comply with all regulatory requirements.

The announcement follows the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019 that came into force on Jan 15, as well as the subsequent issuance of the revised Guidelines on Recognised Markets on Jan 31 2019, which introduces new requirements for DAX operators.

As for DAX operators who have not been approved by the SC, they are required to cease all activities immediately and return all monies and assets collected from investors.

SC says that operating a DAX without authorisation from them is an offence under securities laws – a person in breach may be liable to a fine or imprisonment term, or both.

There’s no stopping investors from continuing to engage these exchanges on their own volition, though. However, the SC advises members of the public to be mindful of the risks related to trading in digital assets, including the risks of trading on exchanges not registered with the SC.

In March this year, it was reported that about half of the 43 DAXes in Malaysia had decided to cease operations in the country. This followed the expiry of the March 1 deadline set by the SC for exchanges to submit their applications to be registered.

Prior to March, the SC had published a list of exchanges which were permitted to continue their operations for the transitional period from Jan 15 until March 1. After the end of the deadline, SC named 21 companies which will have to cease their operations. These exchanges include Blockchains.my (BCMY (M) Sdn Bhd), NuMex Sdn Bhd and Everus Technologies Sdn Bhd.

However, of the 22 companies that submitted their respective applications to the SC, only three have been selected.

Members of the public may verify if a digital asset operator is registered with the SC at https://www.sc.com.my/development/digital/digitalassets