Bank Negara Malaysia Releases Regulatory Draft on Cryptocurrency Exchanges
New regulatory draft aims to combat money laundering and terrorism financing risks in Malaysia
Bank Negara Malaysia Releases Regulatory Draft on Cryptocurrency Exchanges
The Central bank of Malaysia, Bank Negara Malaysia (BNM), has released a new regulatory draft regarding cryptocurrency exchanges. The draft aims to combat money laundering, terrorism financing risks associated with cryptocurrency use, and increase transparency in digital currency activity in Malaysia.
The Bank's governor, Muhammad Ibrahim, had previously stated plans to release regulatory guidelines on cryptocurrency before year-end. The draft proposes that those entities providing digital currency services as defined in the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 must fulfill certain legal requirements, demands, and standards as reporting institutions.
Reporting Obligations and Transparency
Cryptocurrency exchange operators must comply with reporting obligations, including transparency obligations, to declare the details of their operations to banks. They must verify customer identity, monitor cryptocurrency transactions, and report suspicious activities to Malaysian authorities.
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No Permission, Licensing, Recognition or Verification by BNM
The Bank made it clear that reporting obligations do not mean permission, licensing, recognition or verification of digital currency by the BNM.
Image Source: Unsplash
Overall, this regulatory draft enhances the security of cryptocurrency exchanges and helps to prevent money laundering and terrorism financing risks in Malaysia.
Recommending Due Diligence for Handling Digital Currency
The Central Bank of Malaysia recommends that citizens conduct necessary due diligence on entities involved in handling digital currency and providing related services to assess the risks involved.
The draft proposal is open for public feedback, and the Central Bank of Malaysia welcomes written opinions until January 14, 2018.
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