Malaysia Seeks To Streamline Crypto Asset Listings

Malaysia’s Securities Commission (SC) is seeking public input on a proposal to streamline the listing process for digital assets on cryptocurrency exchanges, potentially allowing certain tokens to be listed without prior regulatory approval.

Announced Monday, the SC’s consultation paper outlines a plan to liberalize the framework for digital asset exchange (DAX) operators.

Under the proposed rules, digital assets that meet specific eligibility criteria—such as passing security audits with publicly available results and having been traded for at least one year on a Financial Action Task Force (FATF)-compliant platform—could be listed without explicit approval from the regulator.

The objective of this new proposal is to expertise time-to-market, expand product offerings, and increase operator accountability.

While the new approach would reduce regulatory bottlenecks, it places greater responsibility on exchanges for their listing decisions.

DAX operators would be held accountable for ensuring listed assets meet all requirements.

The SC is also proposing stricter governance and operational controls, including mandatory segregation of client assets and higher financial thresholds for exchanges to reinforce operational resilience.

Seeking Industry Feedback on Higher-Risk Assets

The consultation paper specifically requests industry feedback on whether certain higher-risk assets should be permitted for trading. These include privacy coins such as Monero, which feature heightened privacy in their design.

"The lack of transparency aspect in certain digital assets appeals to individuals involved in unlawful conduct which may result in the increased risk of money laundering and terrorism financing."

Other assets include memecoins, which are vulnerable to extreme volatility and speculative trading and nascent utility tokens which may present additional risks to investors.

The SC is also reviewing the potential inclusion of stablecoins and tokenized assets, with a focus on ensuring robust oversight and investor protection.

To further safeguard user assets, the SC is proposing that exchanges either register as digital asset custodians or partner with SC-registered custodians.

Additional requirements would include appointing a senior management representative based in Malaysia to oversee wallet administration and ensuring comprehensive policies to mitigate the risk of loss or misuse of customer funds.

The SC is inviting feedback from a broad range of stakeholders, including digital asset issuers, regulated exchange operators, financial institutions, and legal professionals.

The public consultation period runs until August 11, 2025. These proposed changes are part of the regulator’s ongoing efforts to enhance the competitiveness, resilience, and integrity of Malaysia’s digital asset market amid rapid industry growth and evolving global standards.