SC Warns Investors of Crypto ATM Usage

The Securities Commission Malaysia (SC) today cautioned the public against the usage of Crypto Automatic Teller Machines (Crypto ATMs).

Crypto ATM is a machine that allows individuals to buy and/or sell digital assets via cash, debit/credit cards or e-wallets. These machines are installed in various locations in Malaysia, facilitating the Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term of different types of digital assets with fiat currency and vice versa.

The SC said it has to alert the public that entities operating Crypto ATMs are considered to be operating a Digital Asset Exchange (DAX) which require registration with the SC. In this regard, the SC has not authorised any entity to operate Crypto ATMs.

“As such, we wish to caution and remind members of the public not to deal with unlicensed or unauthorised entities or individuals. Those who do so are not protected under the Malaysian securities laws and are exposed to various risks, including fraud and Money Laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term,” SC said.

"All unauthorised Crypto ATM operators need to immediately cease their activities"

The regulator also warned all unauthorised Crypto ATM operators in Malaysia to immediately cease their activities. Operating a DAX without authorisation from the SC is an offence under Malaysian securities laws. Anyone convicted may be liable to a fine not exceeding RM10 million or imprisonment up to ten years or both.

The SC’s statement said that members of the public may verify if a digital asset operator is registered with the SC at https://www.sc.com.my/development/digital/digitalassets.

Additionally, it encourages investors to alert the SC if they come across any suspicious activities or websites, and if they receive any unsolicited phone calls or e-mails offering investment advice and opportunities, especially those that offer high returns with seemingly little or no risks.