Malaysia continues to position itself as one of Southeast Asia’s more structured crypto markets, legal to trade, not legal tender, and increasingly watched by two regulators working in parallel.
In 2026, that oversight sharpened considerably: a major guideline overhaul landed in May, enforcement against scams intensified month after month, and the government kept pushing pro-innovation initiatives alongside tighter compliance demands. This report covers all of it.
Two Regulators, One Market
Malaysia’s crypto oversight cannot be reduced to a single authority, it runs on a dual-track system.
Securities Commission Malaysia (SC) — the main regulator. It classifies most digital assets as securities under the Capital Markets and Services Act, licenses exchanges (DAX), custodians (DAC), and Initial Exchange Offering (IEO) platforms, and maintains the Investor Alert List of unauthorised entities.
Bank Negara Malaysia (BNM) — the central bank. It does not recognise crypto as legal tender, oversees AML/CFT policy for the sector, and runs the Digital Asset Innovation Hub, a fintech sandbox for tokenization and stablecoin experiments.
A third, smaller player — Labuan FSA — oversees offshore digital finance activity in the Labuan International Business and Financial Centre, separate from the SC’s mainland framework.
Background: Regulatory Structure Before 2026
Malaysia has been building its crypto rules step by step over the years. It started in 2014, when Bank Negara Malaysia (BNM) said Bitcoin was not legal tender. In 2019, digital assets were officially classified as securities, followed by rules for token offerings and custodians in 2020.
The country then tightened data protection and anti-money laundering rules in 2024 and 2025, while also launching the Digital Asset Innovation Hub, setting up a blockchain working group, and proposing easier token listings for exchanges. Those proposals have now turned into full regulations in 2026.
Also Read : Crypto Regulations in Bhutan 2026: Tax, Bitcoin Reserve, GMC, and Banking Rules
Crypto Regulations in 2026
January 2026
BNM kept open its call for industry feedback on its real-world-asset tokenization roadmap (covering SME financing, Islamic finance, and green bonds), with submissions due by 1 March 2026.
February 2026
The SC issued Practice Note 1/2026, clarifying how Capital Markets Services Licence (CMSL) holders can offer digital asset broking services — covering where digital assets must be sourced from, cash-upfront-only trading, a ban on margin/lending facilities, and restrictions on discretionary account control. Effective immediately upon issuance.
March 2026
BNM’s tokenization roadmap consultation period closed (1 March 2026 deadline), moving the initiative from feedback-gathering into implementation planning for pilot projects.
April 2026
Continued regulatory engagement around exchange compliance, this is also when Bybit, after demonstrating compliance with earlier SC directives, worked through the formal process that led to its later removal from watchlist status (finalized 30 April 2026).
May 2026 — the year’s biggest regulatory event
On 20 May 2026, the SC issued the 14th revision of the Guidelines on Recognized Markets, effective immediately:
- Liberalized the digital asset listing framework — DAX operators can now approve certain token listings without case-by-case SC pre-clearance.
- Tightened financial and shareholding requirements: DAX operators must hold a segregated minimum shareholders’ fund in cash/liquid assets, and must have at least one “Institutional Corporation” shareholder holding 5%+ equity with a board seat.
- Strengthened investor-asset-safeguarding rules, including mandatory independent annual custody assessments.
- Existing DAX operators (licensed before 20 May 2026) get until 20 May 2028 to meet the new capital requirements.
June 2026 and after
Investor Alert List updates continued on a near-monthly cadence, and regional coordination increased. The regulators also removed the unlicensed exchanges.
Also Read : Top Government Bitcoin Holdings in 2025: Which Countries Own the Most BTC?
Crypto Licensing Policy 2026
Malaysia currently offers four main crypto licences:
- Digital Asset Exchange (DAX) for trading platforms
- Digital Asset Custodian (DAC) for firms that store crypto
- Initial Exchange Offering (IEO) operators for token fundraising platforms
- Issuer licences for companies launching their own tokens.
To get licensed, firms must submit business and compliance documents, meet AML/KYC and technical requirements, and follow ongoing reporting rules after approval. Under the updated May 2026 guidelines, existing licensed exchanges have until May 2028 to meet the new capital requirements.
Latest Crypto Crackdowns in Malaysia 2026
In 2026, the Securities Commission Malaysia (SC) continued expanding its Investor Alert List, warning the public against unauthorized investment platforms and crypto-related entities. The latest additions include:
- Gold-X Trading (added in April 2026)
- Imran Finance (added in April 2026)
- Potential clone entity – TeleTrade (added in April 2026)
- HSB Forex (added in April 2026)
- Potential clone entity – SFI Trading (added in May 2026)
- Agung Fondholm (added in May 2026)
The SC also continued enforcement against unlicensed crypto exchanges. Bybit, which had been on the Investor Alert List since 2021 and was ordered to stop serving Malaysian users in late 2024, was removed from the list in April 2026 after complying with the regulator’s requirements.
However, the exchange still requires formal registration with the SC before it can legally offer services in Malaysia.
Adoption, Institutions, and Investors
Meanwhile, despite the strict guidelines, crypto adoption is growing rapidly in Malaysia. By 2025, more than 840,000 people had opened accounts on regulated crypto platforms, making Malaysia one of the top 10 countries for crypto ownership.
Trading volume also jumped 23%, from RM13.93 billion in 2024 to RM17.14 billion in 2025. While Luno remains the country’s biggest regulated exchange, many Malaysians still use overseas platforms for more trading options.
At the same time, traditional finance is starting to embrace crypto, with Halogen Capital launching the country’s first licensed digital asset fund and Affin Bank offering crypto-linked investment products.
Tax Treatment
Malaysia does not have a separate crypto tax law, and long-term investors generally do not pay tax on their crypto gains. However, frequent traders may be taxed like a business, with profits subject to income tax.
Rewards from mining, staking, and DeFi are usually taxable when received. Tax authorities also require users to keep detailed transaction records and have stepped up enforcement through “Ops Token,” a joint operation targeting unpaid crypto taxes.
Key Regulatory Bodies
- Securities Commission Malaysia (SC) — licensing, listing rules, Investor Alert List, market conduct enforcement.
- Bank Negara Malaysia (BNM) — currency policy, AML/CFT standards, Digital Asset Innovation Hub, tokenization roadmap.
- Inland Revenue Board / Lembaga Hasil Dalam Negeri (LHDN) — tax classification and enforcement (badges of trade, Ops Token).
- Bukit Aman Commercial Crime Investigation Department (CCID) — criminal investigation of crypto-linked fraud, scam syndicates, and money laundering.
- Labuan FSA — regulates offshore digital finance activity based in Labuan.
Conclusion
2026 has been a major year for Malaysia’s crypto regulations. The SC made it easier for exchanges to list tokens while adding stricter rules for capital and custody. At the same time, authorities increased action against scams and unlicensed platforms. The government’s broader stance is to support crypto growth through innovation while keeping stronger investor protections in place.
