Malaysia Crypto Trading Hits Record $2.9B as Regulator Proposes Sweeping DAX Reforms

Malaysia’s Securities Commission (SC) has proposed sweeping changes to its digital asset exchange (DAX) regulatory framework. This follows a sharp rise in digital asset trading, which hit a record RM13.9 billion ($2.9 billion) in 2024, more than double the volume recorded in 2023.

According to the consultation paper released by the commission, the proposed updates aim to reduce time-to-market for new tokens while enhancing governance, investor protection, and platform resilience.

Notably, Malaysia’s digital asset market has grown significantly since the DAX framework was introduced in 2019. The surge in trading volume in 2024 was linked to growing interest from both retail investors and institutional participants.

The SC also highlighted increasing involvement from traditional capital market intermediaries, who are gaining exposure to crypto assets through direct investment and fund-based channels.

Malaysia Proposes Faster Listings with Eligibility Criteria Among Other Reforms

Under the proposed reforms, certain tokens may be listed on regulated DAX platforms without first securing the SC’s approval. This change would only apply to digital assets that meet predefined eligibility standards.

According to the regulator, it seeks to cut down regulatory delays and allow exchanges to respond more quickly to market demand. At the same time, DAX operators would bear greater responsibility for ensuring that listed assets comply with legal and risk requirements.

The SC also plans to introduce enhanced governance obligations. DAX operators would be required to segregate client assets from their own operational funds. This move seeks to prevent misuse and bolster trust among users.

SC also noted that operational control standards would also be upgraded to reflect the unique risks of trading digital assets. This includes more stringent oversight of internal processes and improved risk management systems.

Another key aspect of the proposal is raising financial thresholds for licensed DAX operators. The SC said the changes are intended to reinforce the operational and financial resilience of exchanges.

Stronger capital requirements would help ensure that platforms can withstand market shocks and fulfill obligations to clients. The regulator believes this will boost investor confidence and contribute to a more stable trading environment.

Malaysia Ramps Up Crypto Reform Efforts Amid Surge in Mining-Linked Power Theft and Regulatory Gaps

The consultation period runs from June 30 to August 11, 2025 and notably, these proposed changes form part of the SC’s broader strategy to keep Malaysia’s digital asset ecosystem competitive and secure.

The consultation comes amid wider government efforts to position Malaysia at the forefront of responsible fintech innovation. In March 2025, Bank Negara Malaysia (BNM) announced plans to explore asset tokenization and digital asset technologies.

This will focus on collaboration with the private sector and use cases such as tokenized deposits and CBDCs, as outlined in its 2022-2026 financial sector blueprint.

Despite its progressive stance, the central bank cautioned that cryptocurrencies are still not legal tender due to their risks. This cautious approach was echoed in the SC’s recent enforcement actions, which targeted unlicensed foreign crypto exchanges such as Bybit and Huobi Global for operating without registration.

Continuous crypto regulations in Malaysia is understandable as crypto scams and theft surge. Tenaga Nasional Berhad (TNB) reported a 300% rise in power theft linked to illegal crypto mining.

This figure rose from 610 cases in 2018 to 2,397 in 2024, with around 1,699 crypto-related complaints received between 2020 and 2024. This comes as no regulatory body oversees mining operations.

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