Local digital currency firm Kodinar raided, six directors arrested

PETALING JAYA: Several enforcement agencies led by Bank Negara Malaysia (BNM) raided nine premises and arrested six company directors of cryptocurrency company Koperasi Dinar Dirham Bhd (Kodinar), which is registered with the Malaysia Cooperatives Societies Commission (SKM), on Tuesday for alleged illegal deposit-taking.

Kodinar launched its own cryptocurrency, called Pitiscoin, in September 2017. The digital coin was created on the blockchain platform 2.0 Ethereum.

BNM said Koperasi Dinar Dirham was suspected to have committed an offence under the Financial Services Act 2013 (FSA) and the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA).

Nine premises related to the company and its affiliates located in Kuala Lumpur and Selangor were raided, and documents were seized.

Six company directors suspected to be masterminds and agents for illegal deposit-taking activities were arrested and remanded for two days to assist investigations, it added.

The operation, which included SKM, also resulted in the seizure of eight vehicles valued at more than RM1.5 million, RM1.4 million in local and forreign currencies, and 22.5kg of precious metals. A total of 114 bank accounts in 12 banks amounting to RM15.3 million were frozen under AMLA.

The central bank said the authorities are collaborating with Brunei Financial Intelligence Unit to investigate the company’s operation in Brunei for similar offences.

BNM said in a statement yesterday the operation is one of the continuous inter-agencies measures to eradicate illegal financial scheme activities.

The public are advised not to deal with illegal deposit-taking companies for the purpose of investment and should refer to licensed financial institutions which are listed on the central bank’s website for further information.