Malaysia Proposes Overhaul of Digital Asset Exchange Rules
Malaysia’s Securities Commission (SC) on Tuesday released a public consultation paper outlining proposed reforms to the country’s digital asset exchange (DAX) framework, aiming to accelerate token listings and enhance investor safeguards. The proposed revisions include a key shift: allowing certain eligible digital assets to be listed on registered exchanges without prior approval from the SC. The change, subject to minimum criteria, is intended to shorten time-to-market for token issuers and widen product offerings. The public consultation period runs from June 30 to August 11, 2025. Stakeholders, including digital asset issuers, financial firms, legal experts, and licensed DAX operators, have been invited to submit feedback. Tougher Standards for Operators In line with efforts to streamline listings, the SC is seeking to impose stricter governance and operational standards on DAX operators. The paper proposes mandatory segregation of client assets, enhanced internal controls, and stronger financial thresholds for licensed platforms. These measures are aimed at reinforcing the operational and financial resilience of exchanges, ensuring better protection for retail and institutional participants in the country’s expanding digital asset market. The SC stated that the enhancements are designed to reflect the evolving risk landscape of digital finance and to ensure regulatory practices keep pace with market developments. Record Trading Volumes Prompt Regulatory Review The move comes amid rapid growth in Malaysia’s digital asset sector. The total trading volume in 2024 surged to RM13.9 billion ($2.9 billion), more than doubling from the previous year. The SC cited rising activity from institutional investors and traditional capital market players as a factor in the industry’s evolution. Malaysia first introduced its DAX regulatory framework in 2019. While the regime has supported the foundation of a regulated crypto ecosystem, the SC said a more adaptive model is now needed to accommodate higher volumes and more complex market participation. The commission emphasized that the proposed reforms are part of a broader effort to ensure Malaysia remains aligned with international best practices while maintaining market stability. The full consultation paper is available on the SC’s official website. Finalized rules will be introduced following the end of the consultation period and review of stakeholder feedback.