- Malaysia may allow crypto listings without advance approval under new rules.
- Crypto exchanges will soon face tougher asset segregation and capital requirements.
- The consultation is open until August as Malaysia aims to compete globally.
Malaysia’s Securities Commission has shared comprehensive reforms to its digital asset exchange framework. This is aimed at accelerating market development while strengthening investor protections. The proposed changes would enable qualifying digital assets to be listed on licensed platforms without requiring advance regulatory approval.
The consultation paper, published on Monday, mentions a shift toward streamlined processes that could reduce the time-to-market for new cryptocurrency listings. Under the proposed framework, exchange operators would assume greater responsibility for assessing assets against minimum eligibility standards defined by the SC.
Malaysia’s Enhanced Oversight Targets Operational Risks
The proposed framework introduces mandatory client asset segregation requirements for all DAX operators. This action aims to protect investor money from commingling with exchange business capital, addressing a fundamental flaw in the crypto market.
Increased capital requirements for exchange licenses form another key part of the regulatory reform. Operators must demonstrate increased capital adequacy to facilitate platform resilience in the event of market stress and operational disruptions.
The SC aims to enforce stricter governance standards covering exchange management and risk controls. These guidelines aim to ensure that business practices are tailored to the unique risks of digital asset trading.
Malaysia Permits Ownership and Trading of Cryptos
Current Malaysian law permits the ownership and trading of cryptocurrencies, but not their use as a form of legal tender for payment. The Capital Markets and Services Order regards digital assets as securities under SC jurisdiction, rather than central banking regulation.
Approved exchanges are governed by the Recognized Market Operator regime, which encompasses anti-money laundering rules and consumer protection regulations. The SC also maintains an investor alert list of overseas non-compliant platforms that continue to operate despite lacking the necessary authorization.
The consultation period takes place between June 30 and August 11, 2025, to allow various stakeholders to provide feedback on the proposed amendments. The SC calls for comments from licensed exchange operators, digital asset issuers, financial institutions, and legal professionals.
Institutional involvement has increased as traditional financial intermediaries enter the digital asset space. Enhancing regulatory reforms aims to promote such rising interest while promoting market integrity through enhanced oversight mechanisms.
The reforms reflect international trends in the regulation of digital finance, enabling Malaysia to compete with other regimes in creating end-to-end cryptocurrency frameworks. Timelines for implementing the suggested changes will be based on feedback from stakeholders and the final rulemaking process. The SC stated that the approved changes would take effect after undergoing the consultation process and the necessary legal procedures.
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