This article first appeared in The Edge Financial Daily on March 7, 2019

KUALA LUMPUR: About half of the 43 digital asset exchanges in Malaysia have decided to cease their operations in the country, following the expiry of the March 1 deadline set by the Securities Commission Malaysia (SC) for the exchanges to submit their applications to be registered.

The SC had previously published the list of digital asset exchanges — which facilitate the trading of digital coins and tokens such as bitcoin and ethereum — which were permitted to continue their operations for the transitional period from Jan 15 until March 1.

Yesterday, the SC updated the list and named 21 companies which will have to cease their operations as they failed to submit their applications. It also listed out those that are permitted to continue after March 1, until such period as may be notified by the SC, while the regulator reviews their applications.

Those that are exiting the country include Everus Technologies Sdn Bhd, which launched its Everus Mobile Wallet in April last year for its digital coin EVR; BCMY (M) Sdn Bhd or Blockchains.my, another cryptocurrency wallet service provider; and NuMex Sdn Bhd, which operates the NuMoney Exchange.

“Companies which did not submit their application to the SC by March 1 are required to take the necessary steps to cease their business and return all clients’ assets by March 15,” the regulator said in a statement.

Meanwhile, 22 companies have submitted their respective applications to the SC, including Luno Malaysia Sdn Bhd, which operates the Luno platform, and Chako Global Sdn Bhd, which operates the Coinhako platform.

These are allowed to carry on with their operations during the extended transitional period starting March 1, though they are still prohibited to take on new customers and can only service their existing customers, as per the restrictions under the previous transitional period.

The SC said the list of permitted exchanges (in table) could grow, as several foreign companies have expressed interest in setting up operations in Malaysia and have submitted their applications.

The updates were made following the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019 that took effect on Jan 15, 2019.