In an effort to boost the transparency of digital currencies activities in Malaysia, the country’s central bank has unveiled draft regulations that require digital currency exchange operators to report their activities.
Under the proposed policy, which is open to public consultation, digital currency exchanges have been categorised as reporting institutions under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA).
The new rule requires digital currency exchangers to declare their details to the bank. However, the central bank clarified that this invocation of reporting obligations does not imply the “authorisation, licensing, endorsement or validation” of any entities involved in digital currency exchange services.
“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,” Bank Negara Malaysia said.
The central bank also said that digital currencies are not legal tender in the country and will therefore not fall under the remit of prudential and market conduct standards.
It warned consumers on the risks related to digital currencies such as price volatility and cyber-attack and said that in case of losses, users of digital currencies will not be covered under established disputed resolution arrangements.