Malaysia bans ICOs in the latest ruling released by the Malaysian Securities Commission. The commission has recommended banning ‘Initial coin Offerings’ and regulates the ‘Initial Exchange Offerings’ through a series of checks.
Malaysian authorities are undertaking sweeping changes to the country’s unorganized crypto sector. The Asian country has a thriving crypto market constituting of many international and national crypto players. So, when Malaysia bans ICOs, it will surely impact the Asian crypto sector.
Malaysia bans ICOs to regulate an unorganized sector
Malaysian Securities Commission released new guidelines on 15th January 2020, where it clearly stated that ICOs are illegal. Also, it mentioned that digital token issuers must take permission from IEO platforms before conducting token sales. Additionally, only crypto exchanges are permitted to undertake virtual token offerings.
Operators of IEOs must have a minimum RM five million ($1.2M) in paid-up capital. Furthermore, IEO operators have to apply for a license for the ‘Digital Asset Exchange’ platform. The digital token issuers are now required to have a minimum paid-up capital of RM five hundred thousand ($1,23,000) before issuing tokens. The token issuers must-have Malaysian incorporation, and two of its directors must reside in Malaysia. Investment limits have been placed on angel and retail investors.
So, what happens when Malaysia bans ICOs?
When a country like Malaysia bans ICOs, it is bound to produce repercussions. Other Asian countries are also tightening their noose when it comes to crypto operations. China has already banned both IEOs and ICOs. The new rules and regulations will be implemented after June 2020. Until then, the sale of digital tokens is prohibited by any exchange or individual party.
The new ruling provides for an immense scope of growth for the IEOs. They will effectively control the upcoming new token offerings in the country. The SC will work alongside the IEOs to filter any shortcomings in the new token offerings.
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