Malaysia’s Securities Commission (Suruhanjaya Sekuriti Malaysia) has granted full approval to Tokenize Malaysia to operate as a digital asset exchange (DAX) despite the nationwide coronavirus lockdown. The lockdown has been extended until at least April 14 as the country intensifies testing efforts to contain the pandemic.
Tokenize Malaysia CEO Hong Qi Yu told Malaysian national news agency Bernama: “The digital asset industry is by far one of the best equipped and it is business as usual for us as the industry is used to working and communicating effectively across time zones and managing teams remotely.”
Regulatory Framework and Approval Process
Prior to this, the Securities Commission had registered only three recognized market operators (RMOs) to establish and operate cryptocurrency exchanges in Malaysia: Luno Malaysia, Sinegy Technologies, and Tokenize Technology. Out of 23 crypto exchanges that applied, only these three received any form of approval. Luno became the first to meet all regulatory requirements and receive full approval.
The regulator’s move follows the enforcement of the “Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019” on January 15 last year, which established the legal basis for regulating DAX operators. In January this year, the Securities Commission also published digital asset guidelines outlining requirements for digital token offerings. The regulator previously clarified: “Entities which have not been approved by the SC, including those which have previously been operating under the transitional period, are required to cease all activities immediately and return all monies and assets collected from investors.”
Global Trends: Crypto Regulation Thrives During Pandemic
The same week, Japan set an example by approving a new cryptocurrency exchange to operate amid the coronavirus pandemic. Japan now has a total of 23 registered crypto exchanges. These approvals demonstrate that despite the global health crisis, some jurisdictions are pushing ahead with crypto asset regulatory frameworks.
The approvals in Malaysia and Japan signal the digital asset industry’s perceived resilience and potential. With Tokenize Malaysia now holding a full license, it can offer digital asset trading services to clients under a compliant regime. The Securities Commission has not yet disclosed timelines for full licenses to the two remaining conditionally approved operators, but reiterates that all unauthorized entities must cease operations immediately.
The Malaysian Securities Commission’s decisive action during the lockdown shows its commitment to establishing a clear legal environment for cryptocurrency exchanges, even as the world grapples with an unprecedented economic and health crisis.