Malaysia has regulated initial coin offerings (ICOs), as well as the trade of cryptocurrencies, in general. While a framework is yet to be created, the law which came into effect today stipulates that unauthorized cryptocurrency exchanges will carry a jail sentence.
Regulating Cryptocurrency Trade and ICOs
Back in November 2018, the Finance Minister of Malaysia said that the country will regulate ICOs in the first quarter of 2019.
It seems that he has held up to his promise, as Reuters reports that the country has a new set of regulations which will come into effect today.
Citing the Finance Minister himself, the media outlines that digital tokens, as well as cryptocurrencies, will be classified as securities. This will put them under the regulatory purview of the country’s Securities Commission.
Lim Guan Eng, the Finance Minister of Malaysia, said:
In particular, we believe digital assets have a role to play as an alternative fundraising avenue for entrepreneurs and new businesses and an alternative asset class for investors.
Serious Punishments: Jail Sentence
According to the Finance Minister, the regulatory framework has yet to be established. However, as the law on digital currencies has officially come into effect today, January 15th, the industry will be met with a seriously increased regulatory scrutiny on behalf of the Securities Commission.
In fact, failing to comply with the newly introduced legislation can potentially result in a RM 10 million ($250,000) and a 10-year jail sentence, according to a local news media TheStar:
The law on digital currencies and digital tokens will come into effect on Tuesday and any person operating unauthorized initial coin offerings (ICOs) or digital asset exchange faces a 10-year jail and RM10mil fine.
What do you think of the new regulations in Malaysia? Is a 10-year jail sentence too much? Do share your thoughts in the comments below!
Images credit to Unsplash.