Malaysia’s Government Is Reportedly Still Deciding Whether Cryptocurrencies Should Be Legal

The government of Malaysia is reportedly still deciding whether or not cryptocurrencies should be legalized in the country, as according to its Federal Territories Minister Khalid Abdul Samad the “matter was still under consideration” as of January 12.

Speaking to local news outlet New Straits Times, the policymaker revealed that while he was involved in the launch of the Harapan Coin (HRP) – a propose political cryptocurrency – he wasn’t appointed the country’s finance minister, and as such can’t push the matter.

He was quoted as saying:

People have asked me if these [crypto]currencies are legal or illegal. At the moment, the answer is neither legal nor illegal as the situation is still unclear.

Notably, the Malaysian government claimed in December of last year that it was working on regulations for cryptocurrencies and initial coin offerings (ICOs). The Harapan Coin, according to the news outlet, has been pitched to the Bank Negara Malaysia, the country’s central bank, and to Prime Minister Tun Dr Mahathir Mohamad for government transactions.

Shortly after, a Malaysian Member of Parliament reportedly asked the government to set up proper cryptocurrency regulations before considering the HRP project.

Samad’s words came as he was commenting on the success of a school aid presentation for 100 orphans organized by Blockchains.My, a fintech venture. The cryptocurrency scene has been growing in Malaysia, and the country’s authorities have been keeping an eye on the market, as those looking to lunch cryptos must go through the central bank first.

In July of last year, over 12 Indian businessmen reportedly lost thousands of dollars to a Malaysian cryptocurrency Ponzi scheme.

ErisX Tells Regulator's Why Ethereum Futures Would Create Better Markets

  • Nasdaq and Fidelity Investments-backed ErisX exchange sends explanation letter to CFTC.
  • Letter explains that regulated Ether-based futures contract would create more efficient crypto markets.

ErisX, a US-based digital asset exchange, has filed a comment letter with the US Commodity Futures Trading Commission (CFTC) - after the federal regulator requested more information regarding Ethereum (ETH)’s current market.

Submitted on Friday, February 15, ErisX’s letter asserted:

The introduction of a regulated futures contract on Ether would have a positive impact on the growth and maturation of the market.

As covered, ErisX is a newly launched cryptoasset exchange that received $27.5 million in starting capital from multi-trillion dollar investment manager, Fidelity and Nasdaq Ventures, which is Intercontinental Exchange’s (ICE) VC investment division.

Consistent With CFTC's Efforts

In December 2018, ErisX’s management revealed its plans to offer bitcoin (BTC), litecoin (LTC), and ether (ETH) spot trading and it also noted that it was seeking regulatory approval - in order to list cryptocurrency futures at a later point this year. Explaining why such futures contracts would help investors, ErisX’s letter noted that “listing and trading Ether futures compliantly on CFTC regulated markets is consistent” with the financial regulator’s efforts to create “open, transparent, competitive, and financially sound derivative trading markets.”

The letter from ErisX further mentioned that regulated crypto-based futures would “prohibit fraud, manipulation, and abusive practices in connection with derivatives and other products subject to the (Commodity Exchange Act) CEA.” According to the CFTC, bitcoin can be considered a commodity as it has been designed to potentially replace existing fiat currencies (as a medium-of-exchange). Because of bitcoin and ethereum’s decentralized nature, they are arguably not securities, the CFTC has clarified on several occasions.

Explaining the differences between the Ethereum and Bitcoin protocol, ErisX’s letter has stated: 

Ethereum built upon some of the architectural principles of Bitcoin to extend [its] functionality of [a] distributed, (cryptographically) secured, (blockchain-enabled) record-keeping system to include new computational capabilities for the execution of arbitrary code.

"Unregulated Exchanges And Brokers" Trying To "Fill The Gap"

Per ErisX’s analysis of current trends in the global Ethereum (and larger digital asset) market, there is still not a proper regulatory framework in place. This, according to ErisX, has discouraged several large enterprises from entering the fragile crypto ecosystem. At present, ErisX believes there’s a trend emerging in which “unregulated or lightly regulated ‘exchanges’ [and] ‘brokers’ [are trying] to fill the gap, many of them off-shore.” However, ErisX cautioned there may be certain risks associated with this type of market such as increased volatility and liquidity fluctuations.

As noted in ErisX’s letter:

Not unique to Ether, but [current crypto markets could suffer due to] the current fragmented global market structure of trading platforms and ‘exchanges’ with significantly varying degrees of regulatory oversight and operational transparency and integrity.

By introducing standardized, CFTC-regulated Ether-based financial products, ErisX argues the crypto space might receive a more positive response from institutional investors - which could potentially lead to “more robust, liquid, and resilient markets.”