Finance Minister Lim Guan Eng said following the regulation, digital currencies and digital tokens as defined in the order (collectively known as digital assets) would be prescribed as securities and regulated by the Securities Commission Malaysia (SC).

“The offering of such instruments, as well as its associated activities, will require authorisation from the SC and need to comply with the relevant securities laws and regulations,” he said in a statement today.

Lim said the endorsement by the government was in line with the potential of blockchain technology as a tool to spur innovation.

He also said that digital assets provided an alternative fundraising avenue for entrepreneurs and new businesses. It is also an alternative asset class for investors.

“In this regard, the SC will put in place the relevant regulatory requirements for the issuance of initial coin offerings (ICOs) and the trading of digital assets at digital asset exchanges in Malaysia,” he added.

Lim expected the SC framework to be launched by end of the first quarter of 2019.

“Any person offering an ICO or operating a digital asset exchange without the SC’s approval may be punished on conviction, with imprisonment not exceeding 10 years and a fine not exceeding RM10 million,” he added.