Digital asset players to fulfil SC requirements by March 1

By LYDIA NATHAN / Pic By BLOOMBERG

Digital asset players are given transitional period until March 1 to fulfil all conditions specified by the Securities Commission Malaysia (SC) following the implementation of the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019.

According to the SC, these digital platform operators will not be permitted to accept new investors during this period.

It will only be allowed to facilitate the withdrawal or transfer of client assets with written instructions from the investors.

The SC noted that its existing platform operators that did not attend the meeting yesterday should contact the commission before Jan 25, 2019, or deemed to be operating a market in breach of the securities laws.

“Once the relevant guidelines have been issued, existing platform operators will be required to apply to the SC for authorisation if they intend to operate beyond the transitional period,” the SC said in a statement yesterday.

“The SC will evaluate all applications and will only authorise market operators that fulfil the relevant requirements,” it added.

The Order 2019, which came into effect on Tuesday, allows the government to punish any initial coin offering (ICO) activities and digital asset exchanges that operate without the SC’s approval with up to 10 years of imprisonment or fined not less than RM10 million.

Meanwhile, on the ICO, SC said no one should conduct an ICO without prior authorisation beforehand.

The SC added that the guidelines will be ready and issued by the end of the first quarter of 2019.

“In the meantime, ongoing ICOs should cease all activities and return all monies or digital assets collected from investors,” SC said.