Malaysia: Regulators publish IEO regulatory guidelines to take effect later in 2020

Text: Andrew Calderaro

Compile: Damian

Source: Cointelegraph Chinese

Editor's note: The original title was "Malaysian Regulators Issued IEO Regulatory Guidelines"

After the US Securities and Exchange Commission (SEC) issued an investor alert on the First Trading Platform Issuance (IEO), Malaysian regulators issued regulatory guidelines requiring the country's token issuance to be reviewed by the trading platform.

Malaysia IEO Classification

A report issued by the Malaysian Securities Commission (SC) clearly states that digital tokens are only applicable to goods and services and are used under strict guidelines, which will take effect later in 2020.

It is illegal to issue digital tokens in the country without SC approval. The trading platform itself is responsible for reviewing and issuing tokens. The minimum paid-up capital is 5 million Malaysian ringgit (US $ 1,227,000).

Operators wishing to provide digital asset trading services must register as digital asset trading platform operators-more commonly known as cryptocurrency trading platforms. The issuer must meet a paid-up capital of at least 500,000 ringgit ($ 122,700). Retail investors and angel investors must invest no more than 2,000 ringgit ($ 490.80) in the issuer's funds, and no more than 20,000 ringgit ($ 4,908) in 12 months. Experienced investors-with high net worth and rich market experience-will not be limited by the amount of investment. The SC report states that any business transaction must provide value to Malaysia in some way, such as addressing market needs and issues or streamlining processes and services.


SEC issues investor alert

As Cointelegraph wrote yesterday, the SEC seized a large number of non-compliant 1COs (one of which raised $ 13 million) and it now looks like (regulatory) focus is on IEO. Cointelegraph sought comment from a regulatory legal expert, but has not received a response as of press time. This article will be updated as more information becomes available.

A trading platform that supports IEO may require various forms of approval, including commission approval. In addition, the IEO and / or its participants must be able to substantiate due diligence regarding federal securities laws, or they may face penalties. The report added:

The SEC-approved IEO does not exist.