Malaysia’s Securities Commission (SC) has proposed enhancements to its Digital Asset Exchanges (DAX) regulatory framework that would allow crypto exchanges to list certain digital assets without prior SC approval.
The DAX framework, since its introduction in 2019, has kept the digital assets industry in the region in check while also seeing steady growth in the industry. In 2024, the total trading volume in the region reached a record, RM13.9 billion (approximately $3.31 billion) which is more than double of the previous year’s volume.
The current clear regulatory framework has significantly contributed to the growth of the sector by providing appropriate safeguards, which so far have insulated Malaysia from major crypto-related scandals and collapses, such as Terra Luna and FTX,” read the consultation paper released by the Commission. However, this framework needs to be revised due to the growing interest in digital asset investment from both retail and institutional investors.
With the proposed amendments to guidelines on recognized markets for DAXs, certain digital assets could be listed on DAXs autonomously as long as they meet minimum criteria. According to the release, “this aims to accelerate time-to-market, increase DAX operator accountability, and widen product offerings.”
The new listing framework places full accountability on DAX operators for the assets they list. To list a digital asset, its underlying protocol must have gone through security audits, and it must have traded for at least one year on a FATF-compliant VASP. Other than that, the asset needs to meet some other requirements from the RMO Guidelines.
Other than easing crypto listing requirements for DAXs, the amendments also cover stricter asset safeguards. It proposes to require at least 90% of investors’ digital assets to be held in offline wallets, and the remainder in hot wallets, which must be fully collateralised. The SC is currently seeking feedback on these proposed amendments until August 11 to gather views from investors and the public on the changes.
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