Malaysian Central Bank Demands ID for any Crypto Exchange and Transactions

Cryptocurrency took the world by storm, and now the governments and institutions are wondering how to control this power. In due efforts, the Malaysian Central Bank has emphasized the necessity of proper ID during crypto transactions.

With the new central bank anti-money laundering legislation coming into effect from Feb 27, all cryptocurrency exchanges have to fully identify all the traders that are going to use their services. If the exchange is providing any transaction service about cryptocurrencies, be it crypto-to-fiat, fiat-to-crypto or even crypto-to-crypto has to “identify the customer and verify that customer’s identity.”

The policy is passed in hopes to make the exchanges more diligent about security issues. Checking and collection information about customers using the service will help identify money laundering efforts as well as terrorist financing.

According to this legislation, a government-issued ID should preferably be obtained by the exchanges from their customers.

“In conducting CDD(customer due diligence) on an individual customer and beneficial owner, the reporting institution is required to obtain at least the following information:

(a) full name;

(b) National Registration Identity Card (NRIC) number or passport number or reference number of any other official documents bearing the photograph of the customer or beneficial owner;

(c) residential or mailing address;

(d) date of birth;

(e) nationality;

(f) purpose of the transaction.”

Here is what was written on the policy document, ”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 customer and when the reporting institutions have any suspicion of money laundering or terrorism financing.”

Now despite the central bank coming out with this official piece of document regarding cryptocurrency, they are still emphasizing that cryptocurrency is yet to be considered as a legal tender in Malaysia. The bank further states that caution should be practiced while dealing with digital currencies and the associated risks should be well understood.


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