2nd December 2022 - 2 min read
The Securities Commission Malaysia (SC) has given its assurance that cryptocurrency investors who invested through regulated digital asset exchanges (DAX) within the country are not exposed to the aftershocks of the collapse of crypto exchange FTX.
In a statement, the SC emphasised that all licensed platforms in Malaysia are always monitored vigorously for misconducts, thereby ensuring that investors’ funds are safe. Following the FTX saga, this surveillance of local DAXs was intensified even further to get full assurance that Malaysian investors are unaffected.
“These calls to operators could sometimes go up to three times a day. These calls usually mirror global events, and we ask if at all they are exposed to the FTX event. If they are not exposed, we ask them why too. These kind of questions provide SC with the ammunition to protect investors better,” the regulator explained.
For context, FTX – which used to be one of the largest crypto exchanges in the world – collapsed in mid-November 2022 after it was exposed for improper use of customer funds. It subsequently filed for bankruptcy protection in the United States.
“Our key message in the current landscape with the fall of FTX and its ripple effect is that Malaysian investors who still have strong appetite for cryptocurrencies must go to regulated operators. We are advising those who are trading at unregulated space to shift to regulated space so that investors have elements of protection,” said the SC, adding that they cannot offer this protection if investors are performing transactions on platforms that are outside of its regulatory regime.
To date, the SC has approved four DAXs for operation within the country, namely Luno Malaysia, MX Global, SINEGY DAX, and Tokenize Technology.
The SC also shared that all DAXs operating in Malaysia are obliged to segregate their clients’ money from operators’ own money. “So in the event where the operator is subjected to liquidation and so on, it is easy for SC to identify the money of investors,” it explained.
That said, the SC also acknowledged the necessity for moderation in imposing regulations. “There is always a balance between regulating innovation and facilitating innovation. If we impose very strict guidelines, it kills off innovation at the start and defeats the whole purpose altogether,” it said, adding that it will strive to create a conducive environment for progression while properly protecting investors.
(Source: The Edge Markets)
Subscribe to our exclusive weekly newsletter and we’ll bring you the week’s highlights of financial news, expert tips, guides, and the latest credit card and e-wallet deals.
Stay tuned for what’s to come next in the personal finance world