Malaysia's central bank amends anti-money laundering laws, cryptocurrency exchange users must use real names

After Malaysia’s central bank’s anti-money laundering law came into effect on February 27, domestic cryptocurrency exchanges are now required to verify the identity of traders.

New regulations from the Bank Negara Malaysia (BNM) and an official press release state that exchanges offering crypto-to-fiat, fiat-to-crypto and even crypto-to-crypto trading must verify the identity of their customers.

BNM Governor Tan Sri Muhammad bin Ibrahim had already highlighted the need to control the criminal potential of digital currencies in November last year.

Some predict that the advent of digital currencies will represent the beginning of a new era in finance. As an authority, we cannot afford to be indifferent to such developments.

Exchange operators must now comply with various rules for “customer due diligence” (CDD) when opening new accounts or allowing existing accounts to continue legitimate activity, requiring “trusted, independent originals, data or information,” particularly government-issued IDs.

When conducting CDD for individual users and beneficiaries, at least the following information needs to be reported:

(a) Full name (b) National Registration Identification Number (NRIC) or Passport number or any official document number that contains the user or beneficiary's photo information (c) Residential or mailing address (d) Date of birth (e) International (f) Purpose of transaction

Supporters generally welcome formal regulatory measures to increase transparency in the cryptocurrency trading market.

In Asia, Japan began its exchange licensing program in April last year, and there is growing consensus that such moves could help cryptocurrencies enter the mainstream.

Japan’s neighbor South Korea is also considering launching an exchange certification program after its general election in June. The government currently temporarily stipulates that the account information of exchange users must match their bank account information.