Have you ever wondered? What are the differences between a regulated and an unregulated cryptocurrency exchange?
Cryptocurrency exchanges are platforms that allow users to trade, buy, sell, or participate in other services offered by the platform.
Read more on cryptocurrency exchanges here.
Which is regulated and unregulated?
The legal tender of a cryptocurrency and the authorization to operate an exchange is two separate matter.
In some countries, Japan, for example, considered Bitcoin as a legal tender and allow exchanges to operate by registering with the Japanese Financial Services Agency.
However, in the United States of America (US), Bitcoin is not a legal tender, but some states allow exchanges to operate legally.
Mostly, a cryptocurrency exchange needs to get approval from the country’s government regulatory body.
As for Malaysia, there are three cryptocurrency exchanges approved by the Securities Commission Malaysia (SC). Luno, Sinegy, and Tokenize are authorized to operate as a Digital Asset Exchanges (DAX) to date in the country.
Users can check the full list here.
Malaysians can buy, sell, and store cryptocurrencies such as Bitcoin, Litecoin, and XRP legally using these exchanges. Other exchanges apart from the three are considered unregulated in Malaysia.
Which is better?
Which is better is not the real question because each exchange offers different user experiences and services. In terms of comparing regulated and unregulated, the main focus is the security of the users’ investment.
If a user is engaging with unregulated exchanges, the risks involved scams, loss of funds, ineligible for legal assistance, and can be prosecuted for being an accomplice.
In Malaysia, SC can take action on illegal exchanges and if found guilty, a fine not more than RM 10 million or not more than ten years of prison, or both.
Explore digital assets smartly!
While there are other popular cryptocurrency exchanges available, users must understand the risks and be fully responsible for making investments decision.
Always do your own research and check with the regulatory body on which cryptocurrency exchanges you want to invest in.
Have you invested in any digital assets by now?
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A writer, hustler, believer in continuous learning, and believer in creativity can change the world for the better. In Techcryption, Jumali is the Broadcast News Analyst for Bahasa Malaysia and English, covering the 4.0 Industry.