Securities Commission Malaysia (SC) recently published guidelines for initial exchange offerings (IEOs). These would help regulate and legalize initial exchange offerings in the country. Reports suggest that initial coin offerings (ICOs) owned by individual owners are no longer in play as they have put an outright ban on it. Digital token offerings would be done now in the country via (IEOs) rather than (ICOs)
Securities Commission Malaysia (SC) also laid stress on the fact that until the adoption of new guidelines, no sort of digital exchange would prevail in the country. Second-quarter of 2020 is the expected date for the new guidelines to come into force.
Bearing the new regulations in mind, it is mandatory now that IEO platforms carry out the essential computation and due diligence on both token issues, to make it a smooth transition for IEOs. The agency would allow only those tokens to flourish in the country that meet the merit criteria.
The operators have to meet a set standard, in order to become an eligible IEO operator. They should possess a minimum paid-up capital of RM 5 million ( US ($1.2 million) and must not put up in Malaysia unless allowed or instructed by the regulator. The operators in order to thrive, need to maintain a trust account to display the funds received from IEO investors. Lastly, those exchanges that want to trade these digital assets would have to register as Digital Asset Exchange (DAX) platform operators.
Security Commission Malaysia took its first step in June to regulate IEOs
It was in June 2019 that the Security Commission of Malaysia first decided to intervene in this matter. Malaysia started regulating its crypto industry in January, requiring anyone interested in operating a crypto exchange to register as an RMO with the commission. Security COmmisoin Malaysia also ordered the shutting down of 19 crypto trading platforms.