‘All cryptocurrencies’ conversions into cash must be reported as transactions under the anti-money laundering laws in January’
By AFIQ AZIZ / Pic By BLOOMBERG
Bank Negara Malaysia (BNM) is likely to appoint an official cryptocurrency exchange to have a greater oversight and control into the somewhat mysterious digital currency tradings.
The country’s monetary authority on Wednesday announced that all cryptocurrencies’ conversions into cash must be reported as transactions under the anti-money laundering laws, effective January 2018.
The control of cryptocurrency trading was expected after the central bank had said that the digital currency could be used for criminal activities, or to finance terrorism activities.
Digital currency conversion into cash will now fall under the strict Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001.
Luno, one of the biggest and globally recognised cryptocurrency exchangers, could be appointed as the sole crypto exchange, said an industry expert.
Luno is currently one of the most active exchange platforms in the country with offices in Singapore and South Africa. Luno currently trades the two most popular cryptocurrencies — bitcoin and ethereum.
It is believed that the authorities have proposed that Luno expand its presence in Malaysia.
“If it is materialised, our bitcoins will be safely guarded at Luno and transactions monitored,” said the industry source who is familiar with the local digital-currency market. Besides Luno, other cryptocurrencies exchange platforms used by locals are Coinhako and Localbitcoins.
According to the industry expert, Luno is the only platform that has access to the local banks. But digital currency market players are worried such control imposed by BNM would open the door for the authorities to tax on the profit from the transactions.
“There is a chance that the tax collector would tax those who make excessive gains from bitcoin transactions,” said the expert.
The expert also did not rule out the possibility that the 6% Goods and Services Tax (GST) could be imposed for crypto- currency transactions.
Meanwhile, a bitcoin trader said that the control imposed by BNM will help to control money-laundering activities, but the measure would unlikely stop financial transactions related to drugs, weapons and other unlawful dealings.
“Illegal traders can still use bitcoin transfers to purchase illicit products through a normal transaction, which can not be traced by the authorities,” said the trader.
Presently, almost 17 million total bitcoins are in circulation globally.
According to coin.dance page, bitcoin is traded at RM34,111 as at Wednesday with volumes valued at RM2.56 million recorded from Nov 18, 2017, until Nov 22.