InvestSmart 2020 Fest (ISF) is an annual event organized by Securities Commission Malaysia (SC), aiming to create more educated and well-informed investors in making investments decision.
While the year 2020 is a challenging time with the spread of the pandemic, it does not hamper SC’s effort to keep the show going and running. Similar to the earlier event, SCxSC 2020, it is done virtually.
In a fireside session with the representatives from three regulated Digital Assets Exchanges (DAX) in Malaysia, David Low of Luno Malaysia, Kelvyn Chuah of SINEGY, and Hong Qi Yu of Tokenize talks about the importance of trading digital assets with regulated DAX.
There are numbers of DAX available globally, though not all are safe for customers with the risks of cases like ‘pull-rug’ schemes, DAX drying customers fund while claiming their platform encountered issues or hacked leaving customers in the cold.
Unique Third-Party Trustee
SC is the first regulator in the world to introduce a unique system to keep customers’ funds in-check. Third-party trustees are appointed and have oversights on the fund without allowing a DAX to have full access.
For digital assets, portions of it are stored in the cold wallet while the fiat is safe with the trustees.
Digital assets are relatively new to the Malaysian public because of the recent regulations by SC. However, Bitcoin, for example, has been around for a decade and allow scammers and bad players to establish sooner. There are numerous cases in Malaysia involving Bitcoin scams.
By using regulated DAX, customers are dealing with a regulated party that is being monitored by the SC. It will give customers a better sense of securities on their funds and investments.
AMLA Risks Mitigation
The technology involving digital assets is simple and easy to use. Such advantages also invite criminal activities like money laundering or financing terrorism. Through regulated DAX, customers will have to complete a standard Know-Your-Customer (KYC) procedure.
Customers can safely use the DAX and safely guarded against such criminal activities. The procedure will prevent the DAX from getting involved with wanted criminals or Politically-Exposed-Person (PEP).
The digital assets price movement is highly volatile and can create panic for the customers. The regulated DAX in Malaysia are equipped with a circuit-breaker to halt trading activities.
It will allow customers to process and decide their next course of action.
If we were to compare with the features and services provided by unregulated DAX, the regulated DAX are lagging. However, it is to protect and serve the best interest of all parties involved.
Be smart and be safe!