KUALA LUMPUR (March 15): The Securities Commission Malaysia (SC) said several companies which are looking to conduct initial coin offerings (ICOs) are in engagement with the regulator, but made it clear that these engagements are nothing more than talks and discussions.
SC chairman Tan Sri Ranjit Ajit Singh said these companies are the ones that have approached the regulator, instead of the other way around, highlighting that it is important for these players to seek advice as raising funds through ICOs could potentially be in breach of securities laws.
"We have stated very clearly that for any of these potential ICOs, when they are trying to raise any funds from the public, they could potentially be in breach of securities laws and therefore they must come to the SC to seek clarification on this.
"That's the position that we have taken and there have been several that have engaged with us and are currently engaging with us," he said at a press conference today, adding that there have been about 12 companies so far that are in conversation with the SC.
Ranjit added that if the regulator does find other potential ICOs that could potentially be in breach of securities laws — through the SC's own review of their whitepapers — it will take the appropriate action, depending on the nature of the breach.
He also pointed out that the regulator had earlier this year blocked the ICO of Singapore-based CopyCash, which was slated for launching in January.
However, Ranjit made it clear that the engagements with these cryptocurrency issuers have been purely for discussions and nothing more, and reiterated the SC's cautionary stance on ICOs.
"We have stated that this is an area that investors have to be very careful about. We issued several cautionary statements around this and the potential for investors to suffer losses through an ICO is very real. This is consistent with the position that has been taken by many markets around the world," he said.
Meanwhile, he said the SC will continue to monitor developments in the digital assets space and added that the regulator will do more, if there is a need for it.
"Our general position is that digital assets have a place in the new frontier of financial markets, but investors certainly need to exercise caution," he said.
While there have been a lot of debate surrounding cryptocurrencies and ICOs, Ranjit said the regulator does see great potential in blockchain — also known as distributed ledger technology — for capital market solutions.
In fact, the SC has conducted a pilot project to see how blockchain can be applied within the over-the-counter market segment.
Ranjit said the SC is very open to reviewing the applications of blockchain technology, with the regulator to share its findings from the pilot project sometime within the year.