31 January 2018
On 14 December 2017, Bank Negara Malaysia (“BNM”) issued an exposure draft seeking feedback on the invocation of “know-your-customer” obligations on digital currency exchange business as reporting institutions under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001. The proposed policy sets out the legal obligations, requirements and standards that digital currency exchangers must carry out as reporting institutions, including in respect of reporting, record-keeping and customer due diligence. The proposed policy specifies transparency obligations, which are intended to provide relevant information for the public to better understand and evaluate risks associated with the use of digital currencies. Increased transparency will also serve to prevent the use of digital currencies for criminal or unlawful activities.
BNM states in its press release that the invocation of reporting obligations on digital currency exchange business does not in any way connote the authorisation, licensing, endorsement or validation by BNM of any entities involved in the provision of digital currency exchange services. Digital currencies are not legal tender in Malaysia and as such digital currency businesses are not covered by prudential and market conduct standards or arrangements that are applicable to financial institutions regulated by BNM.
The public consultation closed on 14 January 2018.