THE Securities Commission Malaysia (SC) has introduced major revisions to its Guidelines on Recognized Markets, marking a significant overhaul of the regulatory framework governing Digital Asset Exchanges (DAX) as the country positions itself for greater institutional involvement in the digital asset economy.
The enhanced framework is aimed at improving the competitiveness of regulated DAX operators while simultaneously strengthening investor safeguards and boosting the resilience of Malaysia’s fast-growing digital asset market.
The revisions come amid increasing global institutional participation in digital assets and are aligned with Malaysia’s broader ambitions under the Capital Market Masterplan 2026–2030, which seeks to expand the country’s capital market size to between RM5.8 trillion and RM6.3 trillion by the end of the decade.
Under the revised guidelines, the SC plans to accelerate product launches on regulated DAX platforms by streamlining approval procedures while imposing higher standards of accountability on exchange operators.
The updated framework also strengthens governance standards and client asset protection requirements, while introducing tighter operational and financial thresholds covering areas such as capital adequacy, management competency and shareholding structures.
In a further move to improve investor confidence, all DAX operators will become members of the Financial Markets Ombudsman Service (FMOS) beginning in 2026, providing investors with access to a formal dispute resolution mechanism.
At the same time, the SC has intensified enforcement against illegal digital asset activities.
The regulator confirmed that administrative action had been taken against four digital asset exchanges for operating without registration.
The SC also said it had collaborated with technology firms, including Google, to restrict unregistered DAX operators from advertising their services to Malaysians via social media platforms and online channels from 14 April 2026 onwards.
SC chairman Datuk Mohammad Faiz Azmi said the digital asset industry must now evolve in line with the expectations of a mature financial system.
“Our enhanced guideline demands resilient and credible partners within Malaysia’s financial market ecosystem. As the market grows more inclusive and innovative, it must be balanced with the highest standards of governance,” he said.
Malaysia’s regulated digital asset sector has continued to record strong growth, with trading value on licensed DAX platforms rising to RM17.14 billion in 2025, a 23 per cent increase from RM13.93 billion recorded in 2024.
Beyond tightening oversight of exchanges, the SC is also expanding access to digital asset investment products.
The regulator said it had issued a Practice Note clarifying rules surrounding digital asset broking services and updated its Guidelines on Exchange-Traded Funds to permit the offering of digital currency ETFs in Malaysia.
According to the SC, these measures are intended to bridge the gap between traditional financial markets and alternative digital asset ecosystems while preserving the integrity of the capital market.
The revised Guidelines took effect on 20 May 2026 following benchmarking exercises, stakeholder engagement sessions and public consultations conducted last year. - May 20, 2026
