Legal Buzz

Contact Us :

Keeping Your Business Out Of  Trouble And On Track

Issues 27

Think BITCOIN? - Similar Digital Assets in Malaysia

When Bitcoin was first introduced people was sceptical into investing something that was thought too risky. However after few years in the market its value skyrocketed that many missed the golden opportunity to invest when it was affordable. For those who took the risk of the unknown, their investment inflated in a few folds.

Will Malaysia’s recent green light to allow similar digital assets attract investors? Although in its infantry, will investors be guided by what Bitcoin has achieved? It is interesting to see how investors react when our very own digital currency and digital coin is offered to public. Such offer to public is not without strict regulation under the watch of the Securities Commission. It will not be offered on thin air but to support actual projects in which it seeks to fund. Despite the economic turmoil faced by our country, the ongoing health issues spreading across continents, Malaysians especially avid investors will be excited that there will be a new investment opportunities similar to the famous Bitcoin that many made handsome profit from value appreciation.

How does it work? 

The first and foremost requirement for the legitimacy of such offering is an actual projects an issuer of digital tokens seeks to fund without which any application for such offering will be declined. With such strict requirement it is certain that such investment is supported by actual projects to look forward to depending only on how the project is managed and wether the profits large enough to attract handsome dividends and commands investors confidence.

The Securities Commission(SC) will be the regulatory body. Any documents related to the offerings of digital assets to be submitted to the SC. Trading of digital assets will be managed by an electronic platform operator.

Issuer of digital tokens must apply to the electronic operator for issuance of digital assets i.e. actual money exchanged for tokens.

Any interested corporation, who is keen on issuing digital tokens to fund its projects, is known as an Issuer, must comply certain requirements spell out in the application form and disclosure documents. The disclosure documents is known as Whitepaper. One of the requirements is the company to have a minimum RM500,000.00 capital. In its Whitepaper must disclose description of directors, management & key personnel and advises. The amount of fund it intends to raise, its business plan and characteristics and purpose of issuance of the digital tokens. It must also contain a disclaimer statement that digital token is not recognised as legal tender by Bank Negara Malaysia(BNM) and that there is no redress by BNM. The applicant who seeks to issue digital tokens must forward application to an IEO Operator.

IEO Operator is an electronic platform operator registered with the Securities Commission to manage and operate trading of digital token. To be an IEO Operator, it must be a company with a minimum RM1 million capital. The application must be signed by two directors accompanied with a RM5,000.00 fees and all statutory documents such as certificate of incorporation, memorandum of association, most recent audited account, register of directors, managers, secretary and shareholders. The applicant must appoint and disclose representative information. The representative is the most important person who acts an intermediary responsible as the contact person to carry out all requirements of Securities Commission from time to time.

Note: We in KIQ have for various occasions advised and procured significant business agreements for our corporate clients