Cryp­tocur­rency ex­change con­fu­sion

The Star Malaysia - StarBiz - - Short Position -

A LIST of dig­i­tal cur­rency ex­changes pub­lished on the web­site of Bank Ne­gara has stirred some level of in­ter­est. It has led some quar­ters to think that this list is some kind of sanc­tion­ing given by Bank Ne­gara to this group of ex­changes.

How­ever, this does not seem to be the case. For starters, the list ap­pears on the cen­tral bank’s web­site un­der the “Con­sumer Alert & Up­dates” sec­tion. It merely states that th­ese ex­changes are re­port­ing in­sti­tu­tions. Bank Ne­gara has re­it­er­ated its of­fi­cial stance, namely, that the pub­lic must be cau­tious of dig­i­tal cur­rency in­vest­ments and that dig­i­tal cur­ren­cies are not le­gal ten­der.

The cen­tral bank also does not reg­u­late nor does it recog­nise dig­i­tal cur­rency ex­changes. This clearly means that Bank Ne­gara is not in any way giv­ing its bless­ings to th­ese ex­changes.

What is also wor­ry­ing, es­pe­cially if par­ties are tak­ing this list to be a cen­tral bank en­dorse­ment, is that the par­ties be­hind one par­tic­u­lar ex­change on the Bank Ne­gara list seem to ap­pear in al­le­ga­tions of run­ning in­vest­ment scams.

The In­ter­net has a few post­ings al­leg­ing that one of the share­hold­ers of one of the ex­changes listed on Bank Ne­gara’s site is in­volved in a multi-level and bit­coin scam. One won­ders if the au­thor­i­ties have any on­go­ing in­ves­ti­ga­tions into that. Un­der cen­tral bank rules, re­port­ing in­sti­tu­tions are re­quired to com­ply with all re­quire­ments of the Anti-Money Laun­der­ing and Counter Fi­nanc­ing of Ter­ror­ism – Dig­i­tal Cur­ren­cies (Sec­tor 6) pol­icy doc­u­ment is­sued on Feb 27.

Th­ese in­sti­tu­tions also come un­der the purview of the An­tiMoney Laun­der­ing, Anti-Ter­ror­ism Fi­nanc­ing and Pro­ceeds of Un­law­ful Ac­tiv­i­ties Act 2001 or bet­ter known by its acro­nym, AMLA.

In the case of dig­i­tal ex­changes, be­ing on the cen­tral bank’s list of re­port­ing in­sti­tu­tions does not mean that it is li­censed.

What it could mean, though, is that the cen­tral bank may be tak­ing steps to reg­u­late ac­tiv­i­ties in this space de­spite of­fi­cially say­ing it does not. Whether or not this will lead to li­cens­ing, only time will tell.

Newspapers in English

Newspapers from Malaysia

© PressReader. All rights reserved.