According to a SC press release, following a statement by the Minister of Finance YB Tuan Lim Guan Eng on the coming into force of the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019, the regulator will put in place guidelines to regulate token offerings and exchanges.
The order stipulates that the offering of digital assets and associated activities will need to the authorised by the SC as well comply with securities laws and regulations.
The SC said:
"The guidelines will among others, establish criteria for determining fit and properness of Regulators and exchange operators, disclosure standards and best practices in price discovery, trading rules and client asset protection."
Organisations dealing in digital assets will be required to put in place anti-money laundering and counter-terrorism financing (AML/CFT) rules, cybersecurity and business continuity measures.
In his statement, Lim said:
“The ministry views digital assets, as well as its underlying blockchain technologies, as having the potential to bring about innovation in both old and new industries. In particular, we believe digital assets have a role to play as an alternative fundraising avenue for entrepreneurs and new businesses, and an alternate asset class for investors."
He added:
"Any person offering an ICO or operating a digital asset exchange without SC’s approval may be punished, on conviction, with imprisonment not exceeding 10 years and fine not exceeding RM10mil."
Lim also explained that the new framework is expected to be launched by end-Q1 2019.