The Malaysian central bank on Thursday published draft regulations aimed at making digital currencies more transparent in the country.
Bank Negara Malaysia (BNM) is seeking written feedback and comments from the public on the draft, which revolves around the invocation of reporting obligations on digital currency exchange business as reporting institutions under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA). The proposed policy outlines the obligations, requirements and standards that digital currency exchangers must carry out as reporting institutions.
“Failure to declare its details as reporting institutions or comply with the reporting obligations may subject the digital currency exchangers to the enforcement and non-compliance actions as provided under the AMLA as well as the potential termination or denial of use of financial services in Malaysia,” the bank said.
The central bank, however, clarified that the invocation of reporting obligations on digital currency exchange business does not constitute authorisation, licensing, endorsement or validation of any digital currency activity in the country. It emphasized that digital currencies are not legal tender in Malaysia and urged people to carefully assess the risks associated with digital currencies before making any investment.
“Users of digital currencies will also not be covered under established disputed resolution arrangements which exists for regulated financial institutions in the event of any dispute or losses,” it said. “The invocation of reporting obligations on digital currency exchangers is the first step towards making digital currency activities more transparent in Malaysia.”
The public consultation is open until 14 January 2018.
