Malaysia’s Securities Commission ( SC ) is proposing to liberalize the framework governing digital asset exchanges ( DAX ) in the country, in light of the industry's steady growth. 

The regulator, which first issued a DAX framework in 2019, has released a consultation paper inviting the public to comment on several proposed changes to the framework, which could potentially make it easier for certain digital assets such as cryptocurrencies to be listed on digital asset exchanges, if they meet specific criteria. 

“The SC proposes removing its direct concurrence for certain digital assets listings on DAXs, subject to meeting certain minimum criteria. This aims to accelerate time-to-market, increase DAX operator accountability and widen product offerings,” SC says.

In the consultation paper, a digital asset that has been traded for at least a year on any virtual asset service provider ( VASP ) and is in compliance with the 2012 FATF Recommendations could be listed without the SC’s concurrence.  The recommendations by the Financial Action Task Force comprise measures to assist countries in combating money laundering and terrorist financing.

Since introducing the framework in 2019, the country’s digital asset industry has continued to grow steadily. Trading value reached 13.9 billion ringgit ( US$3.27 billion ) in 2024, up 160% compared to the previous year.

Client assets

Other proposed changes include enhancing the requirements relating to safeguarding client assets and governance. These could include requirements relating to the segregation of clients’ assets. 

“This ensures the DAX's governance and operational practices are commensurate with the risks associated with their operations,” the regulator says. 

While the proposed changes could make it easier for digital assets to be listed, there may be increased requirements for DAX operators, such as meeting certain minimum financial criteria to ensure stronger financial and operational integrity and resilience, coupled with robust investor protection mechanisms. 

“This is to instill confidence among capital market participants to trade through or with regulated DAXs,” the SC says. 

The regulator says the proposals aim to “enhance competitiveness of Malaysia’s regulated digital asset market, improve investor protection and strengthen the resilience and integrity of DAX operators”.

The SC is accepting comments from digital asset issuers, prospective and existing DAX operators, financial institutions, capital market participants, and other interested parties until August 11.