The Securities Commission Malaysia (SC) today published a consultation paper to seek public feedback on proposed enhancements to its regulatory framework for Digital Asset Exchange (DAX).
The proposals aim to enhance competitiveness of Malaysia’s regulated digital asset1 market, improve investor protection and strengthen the resilience and integrity of DAX operators.
Since the introduction of the DAX framework in 20192, the SC has observed steady growth in Malaysia’s digital asset industry with 2024 being the highest total trading value of RM13.9 billion, an increase of 2.6 times from 2023.
With the offering of various types of digital assets and services across the capital market, the SC has also observed growing interest from conventional capital market intermediaries and institutional investors seeking to participate in the digital asset space.
This is either through direct investment in digital assets or indirectly via investment funds.
DAXs play a crucial role in enabling responsible access to digital assets investment, in a regulated environment that promotes a fair, transparent and orderly marketplace.
The consultation paper covers the following key areas:
- Liberalise framework for listing of digital assets on DAX, subject to meeting certain minimum 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-tomarket, increase DAX operator accountability and widen product offerings.
- Enhancement of requirements relating to safeguarding client assets and governance
DAX operators will be subject to enhanced operational governance and controls requirements, including requirements relating to the segregation of clients’ assets.
This ensures the DAXs governance and operational practices commensurate with the risks associated to their operations.
- Strengthened requirements for DAX operators
DAX operators will need to meet 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 welcomes feedback from a wide range of stakeholders, including digital asset issuers, prospective and existing regulated DAX operators, financial institutions, capital market participants and other interested parties such as industry associations, legal and compliance professionals.
The public consultation period is from 30 June to 11 August 2025.
The consultation paper is available online at https://www.sc.com.my/regulation/consultation-papers . For any enquiries, please contact the SC at aFINity@seccom.com.my.
- Digitals assets refer to digital tokens and digital currency which fulfils the criteria as prescribed under the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019 which include cryptocurrencies
- The regulatory framework for DAX is set out under the Guidelines on Recognized Markets (RMO Guidelines)
