Malaysia

#14

Crypto Exchanges & Regulation – Top exchanges in Malaysia by Coincub criteria

Country facts

Malaysia crypto score

Trade and store crypto

How can I trade Bitcoin and cryptocurrency in Malaysia?

To trade Bitcoin and other cryptocurrencies in Malaysia, you can follow these steps:

1. Choose a cryptocurrency exchange: There are several exchanges operating in Malaysia, such as Luno, Binance, and eToro.
2. Register and open an account on multiple exchanges and then check the one that offers the cryptocurrencies you want to trade, has a user-friendly platform, and a good reputation in terms of security and customer service.
3. Complete the verification process: Most exchanges require personal information, ID verification, and proof of address to comply with local regulations, that is standard practice.
4. Please be aware of scam websites and impersonators.
5. Add funds to your account: you can deposit Malaysian Ringgit (MYR) into your exchange account and use it to buy cryptocurrencies. Some exchanges also accept other payment methods, such as credit card or bank transfer.
6. Buy and trade cryptocurrencies: Once you have added funds to your account, you can buy cryptocurrencies and trade them for other cryptocurrencies or MYR.

Blockchain community in Malaysia

Malaysia is an avid blockchain economy and blockchain and crypto courses and studies abound in University and further education establishments. The Malaysian Industry-Government Group for High Technology (MIGHT), and many banks are already actively promoting blockchain development throughout the country’s Fintech community which covers areas such as security, cryptography, machine learning, and big data analytics.

The Ministry of Science, Technology, and Innovation have established a special task force to study the implementation of blockchain in the country as well as the shariah-compliant component of the technology.

Initial Coin Offerings and ICOs in Malaysia

Initial Coin Offerings have gained mainstream acceptance around the world, but in Malaysia, ICOs were originally banned and thought to be disreputable owing to the fact that they could be instigated by almost anyone. That said, the Securities Commission (SC), is now offering a more practical way forward whereby issuers of ICOs submit their application to an Initial Exchange Operator (IEO) operator for approval. If approved, the public may invest in the issuer’s offering from the IEO platform with the issuer also satisfying criteria in terms of governance and a capital requirement of at least MYR 500,000 to qualify for fundraising.

Crypto regulation in Malaysia

Introduction to trading Bitcoin in Malaysia

In Malaysia, the provision and trading of digital assets as securities is regulated by the Securities Commission Malaysia (SC), and the trading of digital assets is legally permitted only if it is undertaken through an SC-approved DAX platform. In turn, the DAX operator must be registered as Recognized Market Operators RMOs, with the SC before it can lawfully function as an operator in Malaysia.

Under RMO guidelines, DAX operators are required to maintain confidence and integrity through transparency in performing their functions, by correct procedures in respect of trading activities, and through the protection of their investors’ assets. In this respect, DAX operators are obliged to disclose information about their organizational structure, order types, and transactions on the platform.

Taxes in Malaysia

Bitcoin tax in Malaysia

Malaysia doesn’t tax capital gains on crypto—but frequent trading is considered to be a profession. In Malaysia, cryptocurrency transactions are currently tax-free and digital currencies are not considered assets or legal tender by the authorities. However, (and here’s what often applies when a country is said to be ‘crypto tax-free’) profits from active crypto trading may be regarded as revenue, and thus considered taxable income.  Effectively, if the transaction is more of a casual capital gain or ‘unsystematic’, then the profit from such sale and purchase may be deemed tax-free income. However, ‘active, systemic, and repeated’ trading is deemed to be a regular profession and the gains from those transactions will be subject to income tax. Got that?

Basically, the offering and trading of digital assets as securities are legally permitted in Malaysia, subject to the regulatory requirements governing these activities. However, anyone actively considering this form of investment is strongly advised to get legal guidance on the relevant laws and procedures before going ahead. Businesses involved in cryptocurrency are likewise subject to Malaysian income tax.