Malaysia Digital Asset License

Activities

The Malaysia Digital Asset License, regulated by the Securities Commission Malaysia (SC), allows companies to operate legally within the digital asset space. This license facilitates various services related to digital assets and digital tokens, ensuring compliance with local regulations while promoting innovation in the financial sector.

Digital Asset Exchange
Facilitate the trading of digital assets (digital assets and tokens) on a regulated platform.

Digital Wallet Services
Provide secure digital wallets for the storage, transfer, and management of digital assets.

Custodial Services
Offer custodial solutions for digital assets, ensuring the safekeeping of client holdings.

Digital Assets-to-Fiat and Fiat-to-Digital Assets Conversion
Provide conversion services between digital assets and fiat currencies like MYR (Malaysian Ringgit).

Payment Processing
Enable businesses to process payments using digital assets for goods and services.

Initial Coin Offerings (ICOs) and Token Issuance
Manage or facilitate the issuance of tokens under regulatory conditions.

Advisory Services
Provide consultancy on digital assets and blockchain-related technologies.

Requirements

To obtain a Digital Asset License in Malaysia, companies must comply with strict regulations laid out by the Securities Commission. These requirements include:

Business Plan Submission
A comprehensive business plan that outlines the company’s operations, services, market strategy, and risk management processes.

Minimum Capital Requirement
Companies must maintain a minimum paid-up capital to ensure financial stability. The exact amount varies depending on the nature and scope of the digital asset activities; typically, it is around 5 million MYR (approximately 1.05 million USD).

Fit and Proper Test
Key personnel, including directors and senior management, must undergo a “fit and proper” test to assess their integrity, experience, and capability to run digital asset operations.

Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF)
Implement strict AML/CTF policies, including conducting Know Your Customer (KYC) procedures to ensure compliance with local laws and international standards.

Cybersecurity Measures
Demonstrate strong cybersecurity frameworks to protect client data and assets from cyber threats and hacking attempts.

Physical Office Requirement
Companies must establish a physical office in Malaysia to ensure a local presence and compliance with national regulations.

Regulatory Reporting
Licensed entities must submit periodic reports on their financial status, transaction volumes, and any suspicious activity to the Securities Commission.

Insurance Coverage
Digital asset companies are required to have adequate insurance coverage to protect against risks like cyber theft, fraud, and operational losses.

Ongoing Compliance and Audits
Companies are subject to regular audits and must maintain compliance with the changing legal framework governing digital asset businesses.

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