Association cries foul over new regulations on digital assets

ACCESS Blockchain Association treasurer Affendi Arrifin.

PUTRAJAYA: A blockchain association has hit out at the Securities Commission Malaysia (SC) order on digital assets which came into force on Jan 15, saying it is unfair to industry players.

Affendi Arrifin, the treasurer of ACCESS Blockchain Association, told FMT their main grouse was the classification of digital assets as securities.

“This would mean that we come under the SC, and we will be subjected to licensing, examination and paid-up capital requirements which would be a hindrance to digital assets industry operators who work in a start-up culture,” he said.

Digital assets operators have been given until March 31 to comply with these conditions. During this period, platform operators will not be permitted to accept new investors, and are only allowed to facilitate the withdrawal or transfer of client assets with the written instruction of the investor.

On initial coin offerings (ICOs), the SC said none could be conducted without prior authorisation by the commission. Guidelines for ICOs will be issued by the end of the first quarter of 2019. Meanwhile, ongoing ICOs must cease their activities and return all money or digital assets collected from investors.

Existing platform operators are required to apply to the SC for authorisation if they intend to operate beyond the transitional period.

Prospective operators can also apply to the SC for authorisation once the guidelines have been issued. The SC will then evaluate all applications and give authorisation to market operators which fulfil the requirements.

However, Affendi said they should have been consulted before SC issued the order.

The SC also said digital assets operators who were “uncomfortable” with the order could exit the market by March 31.

It added that the guidelines would be geared towards a disclosure-based regime, and that anyone offering ICOs or operating a digital asset exchange without approval may be punished upon conviction with imprisonment not exceeding 10 years and a fine not exceeding RM10 million. - FMT