Malaysia’s Central Bank Releases Draft Rules for Cryptocurrency Exchanges

Malaysia’s central bank has published new draft regulations for cryptocurrency exchanges that operate in the country.

On Thursday, Bank Negara Malaysia announced the move in a release on its website, asking the public to weigh in on measures aimed at easing money laundering and terrorist financing concerns related to cryptocurrencies.

Following months of work in this area, the proposed regulations require businesses to verify their customers’ identities, monitor transactions and report any suspicious activities to Malaysian authorities. Additionally, companies must report usage statistics to the central bank.

If approved, the regulations would apply to any person or company which exchanges cryptocurrency on behalf of someone else. And while the regulations acknowledge that companies might use cryptocurrencies, the nation officially still does not recognize them as legal tender.

The draft rules state:

“Members of the public are therefore advised to undertake the necessary due diligence and assessment of the risks involved in dealing in digital currencies or with entities providing services associated with digital currencies.”

Bank Negara Malaysia is taking written feedback on the draft rules until Jan. 14, according to the release.

The regulations were explained by governor Muhammad Ibrahim last month as tools to prevent illicit money transmission. While the regulations will only apply to exchanges – “which are being referred to as “reporting institutions” – the country’s securities regulator is looking at creating a framework for cryptocurrencies in general as well.

Kuala Lumpur image via Shutterstock