Securities Commission Malaysia (SC) recently published a set of detailed guidelines to regulate and legalize initial exchange offerings (IEOs) in the country, according to a report. Initial Coin Offerings (ICOs) by individual token issuers would no longer be permitted in the country.
Digital token offerings would now be done via Initial Exchange Offerings (IEO) instead of Initial Coin Offering (ICOs).
SC also stressed that until new guidelines come into force, no person would be permitted to issue any digital tokens in the country. This newly introduced crypto token sale regulation is expected to come into effect sometime in the second quarter of 2020.
In the light of the new regulations, IEO platforms would now be required to carry out the necessary assessment and due diligence on both token issuers and the digital tokens, to be able to conduct IEOs. Only tokens that meet the strict assessment standards set by the agency will be allowed.
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To become an eligible IEO operator, the operators should have a minimum paid-up capital of RM 5 million [US$1.2 million] and must be based out of Malaysia, unless instructed otherwise by the regulator. The operators would also have to maintain a trust account for funds received from IEO investors. Lastly, those exchanges willing to trade these digital assets would be expected to register as Digital Asset Exchange (DAX) platform operators.