SC seeks industry feedback on digital asset wallet providers framework


The Securities Commission Malaysia (SC) is seeking industry feedback on the regulatory framework for digital asset wallet providers, which will complement the existing frameworks for Digital Asset Exchange (DAX) and Initial Exchange Offering (IEO).

Once finalised, the regulatory framework will be included as part of the Guidelines on Digital Assets.

“Digital asset wallet providers are persons who provide custody or storage services on behalf of digital asset owners.

“Such providers play an important role within the ecosystem in safeguarding the digital assets of the client,” the regulator said in a statement today.

It requested that existing digital asset wallet providers or any interested parties contact the SC to discuss their current business operations, and/or to provide feedback on the framework for digital asset wallet providers.

Existing providers and interested persons should contact the regulator to arrange for an engagement session not later than August 14, 2020.

On Jan 15, the SC published the Guidelines on Digital Assets, outlining the framework for fundraising through digital token offerings in Malaysia.

According to the SC’s earlier consultation paper on the “Proposed Regulatory Framework for The Issuance of Digital Assets Through Initial Coin Offerings”, an initial coin offering allows a company with an innovative business proposal to raise capital before it is able to do so through venture capitalists or lenders.

It also allows the firm to raise funds without selling their equity or taking on debt while developing their ideas.

Based on feedback, there is “overwhelming industry support” for the proposal to leverage the expertise of a platform operator to review applications for digital token issuances, the SC had said.

It added the Guidelines on Digital Assets will be enforced in the second half of 2020 to allow potential issuers, platform operators and investors to familiarise themselves with its requirements.