Since 2008, when the elusive Satoshi Nakamoto created the first cryptocurrency Bitcoin, cryptocurrency has been slowly gaining in popularity. Most people have heard of cryptocurrencies, such as Bitcoin and Dogecoin. However, few individuals are likely to comprehend what they are and how important they are in our everyday lives. This post will discuss some fundamental legal problems with bitcoin usage in Malaysia.
Legal Issues of cryptocurrency in Malaysia
- Is cryptocurrency a legal tender in Malaysia?
‘Legal tender’ may appear to be an esoteric term, yet it refers to a legally recognised payment mechanism. Notes and coins produced by the Central Bank of Malaysia (more popularly known as Bank Negara Malaysia, or BNM) are legal money in Malaysia, according to Section 24 of the Central Bank Act 1958. However, as you may have guessed from our explanation of the first issue, bitcoin may be used in bartering or trading. In Malaysia, no regulations are preventing the trade of services or assets for cryptocurrency. However, for this to function, both the donor and the recipient of the cryptocurrency must consent to the transaction. Unlike legal tender, we have the option of accepting or refusing cryptocurrency as payment for our services.
- Is cryptocurrency useful or valuable in Malaysia?
In Malaysia, cryptocurrency payment gateways such as Coinbase Commerce, Bitpay, and Cryptobilis accept cryptocurrencies. In Kuala Lumpur, there are also bitcoin ATMs. Bitcoin has worth in the eyes of a rising populace, but does it have legal value? In the case of Robert Ong Thien Cheng v Luno Pte in 2018, the High Court said that BNM recognises cryptocurrencies as anything with a value linked to it called “shares.” This is because Luna Pte, a cryptocurrency exchange, is registered with BNM as a reporting organisation. As a result, it was determined that cryptocurrencies fit under the meaning of ‘something delivered’ under Section 73 of the Contracts Act 1950.
- Is cryptocurrency taxable?
In Malaysia, cryptocurrency is taxed under Section 3 of the Income Tax Act 1967. However, because the Act does not offer particular information, there is no adequate structure for bitcoin taxation. At the moment, the tax regulator takes a case-by-case approach to each instance.
- Who regulates the cryptocurrency in Malaysia?
Cryptocurrency, often known as digital currency, is classified as a security under securities legislation. This implies that under the Capital Markets and Services Act of 2007, cryptocurrency exchanges would be categorised as stock markets (CMSA). This is why the Securities Commission controls bitcoin, and why, if you want to learn more about cryptocurrencies, the Securities Commission is the best place to start.
- Is it legal to trade cryptocurrency in Malaysia?
However, it is best to only trade on exchanges that are registered with the Securities and Exchange Commission. You can only run an exchange if you are a Securities Commission-registered digital asset exchange (DAX) operator. Otherwise, operating a DAX is a violation of securities laws. If convicted, a person may face a fine of up to RM10 million or a period of imprisonment of up to ten years or both. The Securities Commission requires registered DAX operators to follow tight rules, which provide sufficient protections to protect investors’ interests and limit risks linked to cyber-security, money laundering, and terrorism funding.
In conclusion, I hope that readers, especially those cryptocurrency holders in Malaysia should have a better understanding of the legal issues of cryptocurrency in Malaysia. So what you are waiting for? Go and check out cryptocurrency development company Malaysia for more details and information.