Securities Commission Malaysia (SC) has announced plans to make it easier for cryptocurrency exchanges to list digital assets without needing prior regulatory approval. This move is aimed at speeding up the listing process, promoting innovation, and holding crypto exchanges more accountable.

In a public consultation released this week, the SC seeks feedback from industry players and the public on a proposed framework that could reshape Malaysia’s crypto market. If approved, this would mark a major step toward a more open and flexible regulatory landscape.

Easier Listings for Approved Digital Assets

Under the proposed changes, crypto exchanges in Malaysia may be allowed to list certain digital assets directly, without waiting for approval from the SC. To qualify, the tokens must meet a set of clear criteria:

• The crypto asset must have been traded for at least one year on a platform that complies with international anti-money laundering (AML) standards, particularly those set by the Financial Action Task Force (FATF).

• A publicly available security audit must have been conducted on the asset.

Malaysia’s Securities Commission’s consultation paper. Source: Securities Commission

This would significantly shorten the time it takes for new digital assets to reach the Malaysian market. Currently, all asset listings require formal SC approval, which can be a lengthy process. The new rules are expected to accelerate time-to-market, increase product variety, and shift responsibility for listings onto the exchanges themselves.

Riskier Tokens May Still Face Scrutiny

While the SC is proposing a more relaxed approach for certain digital assets, it is also asking for public input on whether riskier types of cryptocurrencies should be allowed on local platforms. These include:

• Privacy coins like Monero, which use advanced privacy features to hide user identities and transactions. The SC is concerned these may be misused for illegal activities, such as money laundering or terrorism financing.

• Memecoins – tokens inspired by internet culture or trends. These assets, while sometimes popular, tend to be highly volatile and risky.

• Nascent utility tokens – newer digital assets with limited use or demand in the market. The regulator warns that low market interest may make them vulnerable to price manipulation and investor losses.

The SC is carefully weighing the balance between innovation and investor protection, especially when it comes to these high-risk asset classes.

Stronger Rules for Governance and Custody

In addition to changes in listing rules, the SC is proposing tougher standards for crypto exchanges, especially in how they handle user funds. These measures are designed to reduce the chances of financial mismanagement or loss.

Key proposals include:

• Segregation of user assets: Exchanges must keep customers’ funds separate from their own operational funds.

• Minimum financial safeguards: Platforms must implement strong policies and procedures to reduce the risk of loss or theft and ensure customer repayment in the event of insolvency.

• Local oversight: Each exchange must appoint a senior manager based in Malaysia to oversee wallet security and fund management.

These steps aim to ensure higher transparency, stronger consumer protection, and better internal controls within crypto platforms operating in the country.

Custody Rules Get Stricter

The SC is also tightening rules around the custody of digital assets. Exchanges that store cryptocurrencies on behalf of users will now need to:

• Register as digital asset custodians, or

• Use a custodian that is already registered with the SC.

This change ensures that companies handling customers’ crypto wallets meet high standards for security, operational reliability, and regulatory compliance.

Malaysia’s move to ease some crypto listing rules while tightening governance requirements shows a balanced approach. By allowing trusted assets quicker entry to market and demanding greater accountability from exchanges, the SC is encouraging innovation without compromising on safety.

The consultation is now open to public feedback, and final decisions will be based on industry and stakeholder input. If implemented, the new framework could make Malaysia a more attractive destination for crypto projects and investors, while keeping risks under control.