Bank Negara Malaysia Seeks Public Feedback on Cryptocurrency RegulationDecember 14, 2017 3 comments
The rapid development and adoption of cryptocurrencies have driven regulators from around the globe to adopt various approaches and regulatory measures and Malaysia is no exception.
Following the announcement by Bank Negara Malaysia Governor, Tan Sri Muhammad Ibrahim in late November, Bank Negara Malaysia has issued for public consultation for digital currency exchanges as reporting institutions under the “Anti Money Laundering, Anti Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA)
This was done with the specific aim to ensure that effective measures are in place against money laundering/ terrorism financing risks associated with the use of cryptocurrenciesand to increase the transparency of digital currencies activities in Malaysia.
Though the paper was issued for public consultation, it is also made clear that Bank Negara Malaysia still does not recognize cryptocurrencies as a legal tender and that the general public should still conduct their own due diligence when dealing with cryptocurrencies as there are no formal mechanism for legal redress.
The paper proposes that for cyprotcurrency exchanges to comply to a reporting obligations and risk assesments relating to anti money laundering and counter terorrism financing laws that are not dissimilar to the ones that financial institutions in Malaysia are currently complying with. When in effect, the paper also proposes that cryptocurrency exchanges that carries out activities in Malaysia that are not necessarily located in Malaysia to be subjected to the same requirements.
Currently Bank Negara Malaysia still welcomes feedback from the general public and all submissions must be made by 12 January 2018. More info on the paper can be found here
This article was first published on fintechnews.sg
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Typically an easy way out for the central bank who has no idea how to handle the such disposition. Seeking general opinion is not the way. What the public opinion wants is a guideline and best practices to warrant such. As with all governmental authorities, the safest approach is to relegate this to the general public so that they will not be at fault.
To be fair, the regulator is not merely seeking public comment and washing their hands clean, they have come up with a fairly detailed document on how to regulate this from an AML/CFT point of view http://www.bnm.gov.my/index.php?ch=en_press&pg=en_press&ac=4575