Guide on Cryptocurrency Regulations in Malaysia, 2025
Malaysia has established a regulated but crypto-friendly environment, where cryptocurrencies are legal to own and trade but not recognised as legal tender. The country's regulatory framework is primarily governed by the Securities Commission Malaysia (SCM) under the Capital Markets and Services Act 2007 (CMSA).
In this environment, digital assets are classified as either digital currency or digital tokens, with specific guidelines for each. Companies that wish to operate in Malaysia with digital assets must register with the SCM. Currently, there are six licensed crypto exchanges, including Luno Malaysia, Tokenize, and SINEGY, which facilitate trading of approved crypto assets, supporting Malaysian Ringgit transactions.
The SC has approved 22 types of crypto assets for trading, excluding stablecoins and privacy coins. The framework balances innovation and investor protection, with ongoing development in areas like eKYC, a blockchain sandbox program, and participation in Project Dunbar—a cross-border Central Bank Digital Currency (CBDC) pilot alongside Singapore and Australia.
Recent updates include a proposed amendment by the SC aimed at easing the listing process for new crypto tokens on exchanges to boost market competitiveness, while simultaneously imposing stricter requirements on custody and governance to strengthen investor protection and market integrity. These proposals would allow exchanges to list certain tokens without prior approval, provided these tokens have undergone public security audits and been traded on registered platforms for at least a year. There is also consideration for additional rules on assets with enhanced anonymity features to mitigate risks.
Anti-money laundering (AML) compliance is enforced through integration of cryptocurrency regulations with existing laws, including the Anti-Money Laundering and Anti-Terrorism Financing Act 2001 (AMLATFA). The CMSA and SC guidelines require crypto operators to comply with AML and counter-terrorism financing (CTF) frameworks, ensuring regulatory oversight over digital asset activities.
Transaction monitoring, checking the size, trajectory, and frequency of transactions, is necessary in Malaysia's cryptocurrency sector. Registered companies must appoint a compliance officer. Suspicious transactions must be reported immediately. Sanctions and AML screening, checking for customers on sanctions lists or designated as Politically Exposed Persons (PEP), is required.
A risk-based approach is necessary, considering factors like the size of the company and the number of new customers. Customer Due Diligence checks, including identifying and verifying customers, are required. Staff training for employees working in relevant areas is required.
The Travel Rule requires regulated companies to share information on the originators and beneficiaries of wire transfers or digital asset transactions. Bank Negara Malaysia (BNM), the country's central bank, also monitors cryptocurrencies to ensure they do not threaten the financial system's integrity.
Malaysia is considering introducing new laws for cryptocurrency and blockchain in 2025. Companies in Malaysia's cryptocurrency sector must retain records for at least seven years from the last completed transaction or the moment of account termination.
In August 2024, authorities arrested individuals involved in unauthorized Bitcoin mining operations using stolen electricity. In June 2024, Malaysia's Inland Revenue Board initiated "Ops Token," targeting tax evasion in cryptocurrency trading.
In summary, Malaysia’s cryptocurrency regulatory status in 2025 is characterised by a well-defined legal framework focusing on licensing, investor protection, and AML compliance, with progressive measures to develop the sector while addressing risks through targeted regulatory updates.
People interested in sports might find Malaysia's crypto environment intriguing, as it regulates digital assets for trading while maintaining a focus on anti-money laundering compliance. Companies operating in the Malaysian cryptocurrency sector must appoint a compliance officer, conduct customer due diligence checks, and share information on the originators and beneficiaries of transactions.
In the future, Malaysia plans to introduce new laws for cryptocurrency and blockchain in 2025, aiming to further develop the sector while addressing risks through ongoing regulatory updates.
