Kuala Lumpur, Malaysia – Malaysia’s financial watchdog has proposed a significant shift in how cryptocurrencies are listed on exchanges, potentially streamlining the process for digital assets to enter the market without direct regulatory approval.
The Securities Commission Malaysia (SC) announced on Monday that it is seeking public feedback on a framework that would allow crypto exchanges to list certain digital assets more freely. The proposed move aims to modernise the country’s crypto regulatory landscape by reducing time-to-market and increasing accountability among platform operators.
A Push Towards Greater Flexibility
Currently, digital asset exchanges in Malaysia are required to seek explicit approval from the SC before listing any cryptocurrencies. The new proposal suggests bypassing this requirement for assets that meet specific criteria, such as having passed independent security audits with publicly available results and being actively traded for at least one year on platforms that comply with Financial Action Task Force (FATF) standards.
“This aims to accelerate time-to-market, increase operator accountability and widen product offerings,” the regulator said in its statement.
If implemented, the responsibility for listing decisions would shift significantly towards exchanges themselves, making them more accountable for vetting and monitoring listed assets.
Seeking Public Input on High-Risk Tokens
As part of its consultation, the SC is also inviting industry players and the public to weigh in on whether certain categories of riskier assets should be permitted on local exchanges.
One such category includes privacy-focused cryptocurrencies, such as Monero (XMR), which are designed to obscure transaction details. The SC flagged concerns that the lack of transparency in such assets may attract individuals engaged in illicit activities, increasing the risks of money laundering and terrorism financing.
“The lack of transparency aspect in certain digital assets appeals to individuals involved in unlawful conduct,” the SC warned.
Volatile Memecoins and Internet-Inspired Assets
Another group under review is so-called memecoins, which are often created in response to online trends or pop culture phenomena. These coins, such as Dogecoin or Shiba Inu, have gained popularity in recent years but are frequently criticised for their extreme volatility and speculative nature.
The SC is cautious about granting them a place in the mainstream trading ecosystem due to the unpredictable risks they pose to retail investors. Public feedback is being sought to determine whether such assets should remain off-limits or be given regulated space in the market.
Evaluating Low-Demand Tokens
The commission is also assessing whether nascent utility tokens—digital assets that are still early in their development and have low trading volume—should be allowed for trading on regulated platforms. These tokens often serve specific functions within blockchain ecosystems but may lack immediate use or a broad user base, increasing their risk profile.
By seeking industry input, the SC aims to ensure that a balance is struck between innovation and investor protection.
Industry Response and Next Steps
Malaysia’s push to relax regulatory control over crypto listings is part of a broader regional trend towards embracing digital assets while managing associated risks. The SC’s open consultation signals a willingness to collaborate with industry players and align with global best practices.
The proposed framework, if adopted, could position Malaysia as a more attractive hub for digital asset innovation, especially in Southeast Asia. However, much will depend on the final shape of the regulations and how exchanges respond to the increased responsibility.
The public consultation is open for submissions until a yet-to-be-announced deadline. Feedback received will help shape the final guidelines governing cryptocurrency listings in the country.
Leave a Reply