Malaysia’s Central Bank Issues New Policy for Cryptocurrency Exchanges

The Bank Negara Malaysia has announced new policies for cryptocurrency exchanges which have gone into effect today.

In an announcement, the central bank said that its ‘Anti-Money Laundering and Counter Financing of Terrorism Policy for Digital Currencies’ was issued after receiving feedback from a public consultation. According to the notice, it aims to:

…ensure that effective measures are in place against money laundering and terrorism financing risks associated with the use of digital currencies and to increase the transparency of digital currency activities in Malaysia.

This move by the bank comes after months of public consultation on the issue in December. Feedback was received from representatives of existing cryptocurrency exchanges, industry associations, law firms, financial institutions, academia as well as interested individuals. The feedback mainly focused on the obligations imposed by digital currency exchanges, in addition to businesses providing intermediary services involving cryptocurrencies, the announcement said.

In the policy document it called for cryptocurrency exchanges to carry out due diligence checks on customers who are using their trading platforms. It reads:

Reporting institutions are required to conduct customer due diligence on all customers and the persons conducting the transaction in the circumstances set out below:

(a) when the reporting institution establishes business relationship with customer; and

(b) when the reporting institutions have any suspicion of money laundering or terrorism financing.

The bank added, however, that this measure was not an endorsement from them:

The Bank wishes to reiterate that the invocation of reporting obligations on digital currency exchange business does not in any way connote the authorisation, licensing, endorsement or validation by the Bank of any entities involved in the provision of digital currency exchange services.

Malaysia’s central bank also took them time to remind the public that cryptocurrencies are not legal tender in the country. Those trading in the market are advised to ‘carefully evaluate the risks’ linked with digital currency trading, the bank said.

Accordingly, digital currency businesses are not covered by prudential and market conduct standards or arrangements that are applicable to financial institutions regulated by the Bank.

The post Malaysia’s Central Bank Issues New Policy for Cryptocurrency Exchanges appeared first on Bitcoin Network, News, Charts, Guides & Analysis.