The Securities Commission Malaysia (SC) has announced a proposal aimed at streamlining the process for listing digital assets on cryptocurrency exchanges. In a statement released Monday, the regulator invited public feedback on the plan, which would allow certain crypto assets to be listed without prior approval from the SC—provided they meet predefined criteria.
The proposed framework seeks to liberalize the current system, enabling exchanges to list eligible assets more quickly while increasing their accountability. According to the SC, this move is intended to “accelerate time-to-market, enhance operator responsibility, and broaden the range of available products.”
Under the new guidelines, exchanges would bear full responsibility for the assets they choose to list. To qualify, digital assets must have undergone publicly disclosed security audits and must have been traded for at least one year on platforms compliant with Financial Action Task Force (FATF) standards.
Which assets may be approved?
The SC is also seeking industry feedback on whether higher-risk assets—such as privacy-focused cryptocurrencies like Monero, which offer enhanced anonymity features—should be allowed for trading.
“The lack of transparency aspect in certain digital assets appeal to individuals involved in unlawful conduct which may result in the increased risk of money laundering and terrorism financing.”
The regulator is also requesting feedback on other categories of digital assets, including those “designed to follow internet trends or popular culture,” commonly referred to as memecoins, which are often associated with extreme volatility.
In addition, the SC is seeking input on stablecoins and tokenized assets, as well as exchange tokens, which may present potential conflicts of interest. It is also evaluating the risks associated with low-demand assets, such as “nascent utility tokens,” due to their limited market traction and higher risk profile.
Stricter Rules Introduced for Governance and Asset Custody
The SC has also proposed an overhaul of governance and client asset protection requirements. Under the new rules, digital asset exchange operators would face stricter regulations, including mandatory segregation of user assets to enhance security.
Exchanges would need to meet new minimum financial standards and implement robust policies and procedures to prevent the loss or misuse of user funds, as well as ensure repayment in the event of insolvency. Additionally, they would be required to appoint a senior management representative based in Malaysia to oversee wallet administration.
“This would relate to mitigating the risk of loss or misuse of customers’ assets and facilitating movement of digital assets.”
Finally, crypto exchanges that hold user assets would be required to either register as a digital asset custodian themselves or partner with a custodian that is registered with the SC to handle custody services.
