Crypto Exchanges in Malaysia May Soon List Selected Tokens Freely Under Proposed Rules Amid Rising Market Demand — But Can Exchanges Handle the Responsibility?

Malaysia’s Securities Commission Proposes Easier Crypto Listings and Tighter Exchange Rules

Crypto exchanges in Malaysia could soon list certain digital assets without waiting for the Securities Commission’s approval, if the regulator’s latest proposal goes ahead.

The move aims to speed up how quickly new tokens reach the market while making exchanges more responsible for what they list.

How Will Crypto Listings Change and What Are the Risks

The Securities Commission Malaysia (SC) is asking the public and industry experts for feedback on allowing digital assets that meet clear criteria to be listed directly by exchanges.

These tokens must have been traded for at least a year on platforms compliant with the Financial Action Task Force (FATF) standards and have passed security audits with results made public.

While this could shorten delays for introducing new tokens, exchanges will carry the full burden of ensuring assets meet all regulatory and risk standards.

The regulator is also questioning whether certain types of higher-risk coins, such as privacy-focused cryptocurrencies like Monero, which offer strong anonymity, should be allowed at all.

Source: Securities Commission

The concern is these coins could be exploited for money laundering or terrorism financing due to their lack of transparency.

Other categories under review include “memecoins,” which tend to follow internet trends and are known for their extreme price swings, and emerging utility tokens with limited market demand, which carry their own risks.

Stricter Rules for Exchange Operations and Client Assets

Alongside listing changes, the SC plans tougher governance standards for digital asset exchanges.

Exchanges will need to separate customer assets from their own funds to prevent misuse and to protect clients in case of insolvency.

This includes new financial requirements and the appointment of a senior management official based in Malaysia responsible for overseeing wallet administration and safeguarding assets.

Exchanges that hold custody of user assets must either register as digital asset custodians or use custodians registered with the SC, aiming to tighten control over how client funds are handled.

Trading Volume Growth Drives Regulatory Updates

These proposals come amid rapid growth in Malaysia’s digital asset trading.

In 2024, trading volumes surged to RM13.9 billion ($2.9 billion), more than doubling the previous year.

Interest has grown among retail investors, institutional players, and traditional capital market intermediaries now dipping into crypto via direct and fund-based investments.

The SC’s consultation paper, published on 30 June 2025, reflects this growth by seeking a regulatory balance that encourages innovation without compromising investor protection or market stability.

Past Enforcement Highlights Need for Oversight

The SC’s efforts to tighten regulation follow several enforcement actions against unlicensed crypto platforms operating in Malaysia, such as Bybit and Huobi Global, which were ordered to halt operations for lacking proper registration under the Capital Markets and Services Act 2007.

The surge in crypto scams and thefts adds urgency to regulatory reform.

For example, Tenaga Nasional Berhad reported a 300% rise in power theft related to illegal crypto mining between 2018 and 2024, highlighting indirect risks tied to unregulated activity.

Is Malaysia Balancing Innovation with Risk Effectively?

The SC’s approach signals a desire to keep Malaysia’s crypto market competitive while addressing risks in governance, asset security, and market integrity.

By shifting responsibility for asset listings onto exchanges and raising operational standards, the regulator hopes to build a more resilient ecosystem.

Yet questions remain about how well exchanges will manage the increased accountability and whether certain risky tokens should be traded at all.

The debate over privacy coins and memecoins points to broader challenges in regulating a fast-moving industry where innovation and risk often collide.

Is Malaysia Setting a Smarter Standard or Stepping Into Grey Zones?

As Malaysia charts a path to foster crypto innovation, its regulator faces the delicate task of encouraging market growth without opening doors to fraud or instability.

Allowing quicker token listings may speed up business but also tests the readiness of exchanges to police themselves effectively.

How the industry responds and adapts could determine whether Malaysia becomes a leader in responsible digital asset markets—or a cautionary tale of regulation outpaced by innovation.