Malaysian Central Bank Enforces Customer ID For Cryptocurrency Exchanges


The Central Bank of Malaysia has introduced new requirements that require cryptocurrency traders to have a customer ID which they will use in any cryptocurrency-related transactions.

Malaysia’s Bank Negara made the announcement on Tuesday revealing the implementation of the new requirement that is aimed at combatting money laundering. The move comes after a lot of public consultations for the past few months. Officials of the Malaysian Central bank published the draft rules in December last year so that they could get feedback especially from stakeholders in the industry. The officials made the matter public as early as September 2017.

Malaysian central bank has been contemplating on the matter for some time and there has been a lot of speculation. It is part of its plans to implement measures against illegal activities such as funding terrorism and money laundering activities.

“Reporting institutions are required to conduct customer due diligence on all customers and the persons conducting the transaction when the reporting institution establishes business relationship with the customer and when the reporting institutions have any suspicion of money laundering or terrorism financing,” points out one of the policy document.

Tan Sri Muhammad bin Ibrahim, the Governor of Bank Negara Malaysia (BNM) stated that there is a need to control the use of cryptocurrencies to discourage illegal activity. This is important especially now that digital currencies have proved that they are here to stay and have ushered in a new age especially for the financial sector.

The newly implemented regulations by BNM will require cryptocurrency exchanges, operators and users to comply with the rules which revolve around customer due diligence. Users, whether new or existing will not be allowed to use their accounts unless they are compliant. Cryptocurrency users will be required to submit information that includes their full name, national registration identity card or passport number, their residential address, nationality, date of birth and purpose of the transaction.

The regulations mean cryptocurrency users will be subjected to strict rules that might feel as if they take away the flexibility that they have been enjoying all along. However, this makes Malaysia one of the first countries to implement such regulations.


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