Is Cryptocurrency Legal in Malaysia?
Cryptocurrencies: Not legal tender
Cryptocurrency exchanges: Legal, must register with the Malaysian Securities Commission
Although cryptocurrencies are legal in Malaysia, they are not considered legal tender. The country’s central bank, Bank Negra Malaysia, has issued a statement specifically confirming non-legal tender status for Bitcoin and advising the public to “be cautious of the risks associated with the usage of such digital currency”. In 2022, Malaysia’s Finance Minister suggested that the government’s attitude to cryptocurrencies was unlikely to change in the near future, stating: “Digital assets such as Bitcoin and Ethereum are not suitable to be used as a payment instrument… In general, digital assets are not a store of value and a good medium of exchange.”
Malaysia Cryptocurrency Regulations Overview
Cryptocurrencies: Cryptocurrency regulations in Malaysia draws on existing financial legislation. The Malaysian authorities typically consider cryptocurrencies to be securities and so tokens are regulated under securities laws and overseen by the Malaysian Securities Commission (SCM) under the authority of the Capital Markets and Services Act 2007.
Cryptocurrency Exchange Regulations: Malaysia regulates cryptocurrency exchanges under the Guidelines on Prevention of Money Laundering and Terrorism Financing for Capital Market Intermediaries 2014. Those rules were amended by the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019, and the Guidelines on Recognized Markets 2019.
Following compliance regulations and guidelines, cryptocurrency exchanges in Malaysia are required to register with the SCM in order to operate. The registration process involves a set of criteria, including requirements for exchanges to demonstrate the fitness of their senior management employees, and their ability to manage the AML/CFT risks associated with their business. Once successfully registered, cryptocurrency exchanges in Malaysia must abide by a set of AML/CFT obligations, which include implementing suitable customer due diligence measures and submitting reports on suspicious customer transactions to the SCM.
There are currently four registered digital asset exchanges operating under cryptocurrency regulations in Malaysia: Luno, MX Global, SINEGY Technologies, and Tokenize Technology.
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Future of Malaysia’s Cryptocurrency Regulations
While the Malaysian government has indicated that cryptocurrencies are unlikely to be accepted as legal tender, and continues to warn the public about their dangers, there are suggestions that a more flexible regulatory approach may be possible.
In March 2022, deputy communications and multimedia minister Datuk Zahidi Zainul Abidin from the Ministry of Communications and Multimedia (KKMM) publicly proposed potential reforms to cryptocurrency regulation in Malaysia. Specifically, he argued that certain crypto assets could be legalized in order to help younger Malaysians participate in the financial system. Zahidi called the crypto industry the “business and financial program of the future”, and added “we hope the government can try to legalize this matter so that we can expand the participation of young people in cryptocurrencies and help them in terms of energy consumption and so on”.
Malaysia has also started to explore the potential of a Malaysian central bank digital currency (CBDC). In 2021, Bank Negra Malaysia worked with counterpart institutions in Australia, Singapore, and South Africa to test the efficiency of a CBDC. The central bank said that its research was being focused on “proof-of-concept and experimentation to enhance our technical and policy capabilities, should the need to issue CBDC arise in the future”.
Explore the wider AML/CFT regulatory landscape in Malaysia in this article.
FAQs
Crypto in Malaysia is legal. However, Malaysia doesn't recognize digital assets as legal tender or as a payment instrument.
Is crypto investment legal in Malaysia? ›
There are no laws prohibiting the exchange of services or assets of cryptocurrencies in Malaysia. For example, US Dollars are not legal tender in Malaysia, but that doesn't mean it's illegal for you to use it if it's accepted by the merchant. The giver and receiver of the currency must both simply agree to the trade.
Is crypto mining legal in Malaysia? ›
Akmal Nasrullah Mohd Nasir, deputy energy transition and water transformation minister, said on Wednesday that the illegal crypto mining activities have become more widespread, local news website Malay Mail reported.
Is Malaysia crypto friendly? ›
Several countries have no crypto tax, allowing individuals to buy, mine, and trade crypto without tax implications. Some notable examples include Belarus, Bermuda, Cayman Islands, El Salvador, Georgia, Germany, Hong Kong, Malaysia, Malta, Puerto Rico, Singapore, Slovenia, Switzerland, and the United Arab Emirates.
Is crypto legally regulated? ›
From the SEC's perspective, many cryptocurrency offerings are effectively the same as securities sales. This means that cryptocurrency companies must comply with the same investor protection standards that govern publicly-traded companies.
Can I buy cryptocurrency in Malaysia? ›
The following cryptocurrencies are available to buy in Malaysia with MYR: Bitcoin, Ethereum, XRP, Litecoin, Bitcoin Cash, Uniswap, Chainlink, Solana, Cardano, Avalanche and Polygon.
Is Coinbase legal in Malaysia? ›
The Malaysian government has not imposed any restrictions on the use of Coinbase, so you can trade and invest in cryptocurrencies without any worries.
Can I withdraw crypto in Malaysia? ›
Yes, you can sell bitcoin in Malaysia, as well any of the 13 approved cryptocurrencies. The easiest way is to sell directly on the 4 licenced exchanges. Upon a successful Sale, you'll receive MYR, which you can withdraw directly into your bank accounts.
Does Malaysia tax crypto? ›
As Malaysia does not tax capital gain, only revenue gains arising from the disposal of digital currency is taxable. A person who trade digital currencies actively may be viewed as generating revenue from the activity, thus gains from this digital currencies trading is taxable.
Is Malaysia a mining country? ›
Malaysia is rich in mineral resources, and mining (including petroleum extraction) accounts for a significant portion of GDP, although it employs only a tiny fraction of the workforce. The major metallic ores are tin, bauxite (aluminum), copper, and iron.
According to a survey on cryptocurrency ownership by Oppotus, 30 percent of Malaysian respondents owned a cryptocurrency in the fourth quarter of 2023. This was a decrease compared to the same period in 2022, when 36 percent of respondents said they owned cryptocurrency.
Who accept Bitcoin in Malaysia? ›
Overstock is one of the few international online stores that allows Malaysians the option to shop with bitcoin. Overstock is an online retailer of everything – very much like Amazon – with a focus on furniture. Spunky local online marketplace startup, Ked.ai is another local online joint that accepts bitcoins.
What is the most popular crypto exchange in Malaysia? ›
There are 6 trusted exchanges operating in Malaysia with the most popular being Binance , Kraken , and Luno. You can review each of these exchanges and find best exchange that works for you.
How many countries have banned cryptocurrency? ›
Cryptocurrency Legal Status Around the World
| Crypto Legal Status | No of Countries |
|---|
| Legal | 119 |
| Illegal | 22 |
| Neutral | 25 |
| Regulated *Not mutually exclusive with countries where crypto is legal | 62 |
1 more rowDec 11, 2023
Legal framework: Falling under the SEC's regulations could legitimize cryptocurrency enterprises and attract more traditional investors and institutions, potentially leading to broader adoption.
Why can't crypto be regulated? ›
By their very nature, cryptocurrencies are freewheeling, not beholden to country borders or specific agencies within a government. However, this nature presents a problem to policymakers who are used to dealing with clear-cut definitions for assets.
Is Malaysia tax free on cryptocurrency? ›
Malaysia. Singapore's neighbor Malaysia is also a crypto tax free country. Because cryptocurrencies are not viewed as capital assets nor a legal tender by Malaysian authorities - crypto transactions are tax free for individual investors. This comes with a caveat though.
How much is 1 Bitcoin in Malaysia? ›
Why was Binance banned in Malaysia? ›
The SC's official reason for placing it on the Alert List is that Binance is operating a “recognized market without authorisation”.
