Malaysia's Securities Commission (SC) has released a consultation paper proposing significant updates to its regulatory framework for digital asset exchanges (DAX). The proposed changes aim to expedite token listings by allowing certain digital assets to be listed without prior SC approval, provided they meet specific eligibility criteria. The regulator also plans stricter governance and operational requirements for exchange operators, including mandatory segregation of client assets and higher financial thresholds.
The SC is collecting public feedback on the proposals from industry stakeholders until August 11. The reforms build on earlier efforts to tighten oversight of the digital asset industry, following enforcement actions against unlicensed exchanges like Bybit and Huobi Global. Malaysia's digital asset sector has seen significant growth, with trading volumes reaching RM13.9 billion ($2.9 billion) in 2024.
The SC is also seeking input on whether higher-risk assets, such as privacy coins (e.g., Monero (XMR)) and memecoins, should be permitted for trading. Additionally, the regulator proposed stricter custody rules, requiring exchanges to register as digital asset custodians or engage a registered custodian.