KUALA LUMPUR (Oct 28): The Securities Commission Malaysia’s (SC) revised Guidelines on Digital Assets to regulate Initial Exchange Offerings (IEO) and Digital Asset Custodians (DAC) came into force today. 

In a statement, the SC said the guidelines will facilitate its objectives in promoting responsible innovation in the digital asset space, while simultaneously managing emerging risks and safeguarding the interests of issuers and investors. 

In January, the regulator had announced a framework to enable companies to raise funds via the issuance of digital tokens in Malaysia through an IEO platform registered by the SC.  

Under the guidelines, IEO platform operators will be required to assess and conduct the necessary due diligence on the issuer, review the issuer’s proposal and the disclosures in the whitepaper, and assess the issuer’s ability to comply with the requirements of the guidelines and the SC’s Guidelines on Prevention of Money Laundering and Terrorism Financing. 

The SC said the guidelines also include rules and regulations on DAC to facilitate interested parties who wish to provide custody services for digital assets.  

The regulator noted that DAC play an important role within the digital asset ecosystem of the Malaysian capital market. 

Those who wish to register as an IEO platform operator or DAC can start submitting their applications to the SC, with the deadline for applications for IEO platform operators set on Feb 15, 2021. 

“The SC would like to remind members of the public that they are not permitted to offer, issue or distribute any digital assets in Malaysia without obtaining a registration or authorisation from the SC.  

“Any person found to be operating a digital exchange or offering or distributing any digital assets without the SC’s authorisation commits an offence and may be liable, on conviction, to a fine not exceeding RM10 million or imprisonment for a term not exceeding 10 years or both,” it cautioned.