Malaysia has continuously enhanced its position towards cryptocurrencies, considering both innovation, the safety of investors, Malaysia Crypto Regulations and the principle of Islamic finance. By 2025, the nation has consolidated the position as one of the most active regulators of the digital asset in Southeast Asia. Though cryptocurrencies are not considered legal tenders, they are wholly tradeable within the Malaysian jurisdiction at a time when the country is considered the most suitable destination of compliant crypto-related businesses.
Regulatory Framework Overview
Malaysia regulates cryptocurrencies under the Capital Markets and Services Act (CMSA) through the Prescription Order 2019, classifying digital assets as securities.
Oversight is split between:
- Securities Commission Malaysia (SC): License, regulatory and oversight of crypto trading, Initial Exchange Offereings (IEOs) and Digital Asset Exchanges (DAXs).
- Bank Negara Malaysia (BNM): Keeping financial stability, supervision of the rules of AML/CFT rules.
- The combination of the two will enable Malaysia to promote innovation and maintain strict control over financial risk.
Licensing & Market Structure
To operate legally, crypto exchanges in Malaysia must register as Recognized Market Operators (RMOs) under the SC. Approved platforms include:
- Luno Malaysia
- Tokenize Exchange
- SINEGY
- MX Global
- HATA Digital
For IEOs, operators must secure separate licenses, including a minimum RM5 million paid-up capital requirement. This has set high entry standards but ensures only credible players enter the Malaysian crypto ecosystem.
Strengthening Regulatory Infrastructure in 2025
Malaysia has made major regulatory moves in 2025 to improve investor protections and competitiveness:
- Public Consultation Paper 3/2025: Proposed changes to increase listing by DAX, to tighten governance and to strengthen operational resilience.
- Crypto Market Growth: The digital asset trading in Malaysia increased to RM13.9 billion in the year 2025 indicating the growth of 2.6 times as compared to the year 2023.
- Shariah-Compliant Framework: Malaysia unveiled a new schedule under which Shariah compliant staking and token sales will be permitted, another step in connecting Islamic finance and digital assets.
AML, Data Protection & Compliance
Regulators tightened their regulations in 2025 through anti-laundering and anti-environment policies.Crypto platforms must now:
- Enforce robust KYC and transaction monitoring.
- Maintain strict reporting standards.
- Strictly adhere to the Personal Data Protection Act (PDPA) to be enforced in the country in 2024 although later expanded to cover businesses in crypto.
- Failure (to comply) is highly punishable, and demonstrates the staunch zero-compliance administrative view of illicit activities in Malaysia.
Taxation & Enforcement
Malaysia treats crypto income as taxable under income tax law. Profits from trading or withdrawals are taxable, while holding crypto is not subject to tax.
In 2024, the Inland Revenue Board launched Ops Token, uncovering widespread underreporting of crypto income. This has increased tax enforcement in 2025, pushing both individuals and businesses toward full disclosure.
Market Structure & Liquidity Trends
Though the crypto market is highly regulated, there are issues related to the crypto market in Malaysia:
And only 23 accepted crypto can be listed on SC-approved exchanges.
Malaysian exchanges have a tiny market tally representing less than 1 percent of the overall business network as most traders in Malaysia prefer offshore exchanges due to the availability of liquidity and increased financial assets
This highlights the need for regulatory updates to remain globally competitive.
Malaysia’s Vision for Crypto & Web3
Malaysia plans on becoming a regional focal point regarding controlled crypto innovation. The unmatched advantage that it holds is its approach to aligning digital assets and the principles of Islamic finance, and this factor is going to make it a rather appealing destination to conduct Shariah-compliant blockchain initiatives.
Through reforms being instituted, Malaysia is lining up against Singapore and Hong Kong, at the forefront of crypto Asian hotspots, but as a stand out Malaysia is taking a more Shariah compliant approach.
What This Means for Stakeholders
- Investors: Crypto trading is legal if done through licensed platforms, but options remain limited. Tax obligations must be met.
- Crypto Businesses: MUST be in line with the SC and BNM licensing framework, tight governance, and AML regulations.
- Startups & Innovators: Sandboxes and Shariah-compliant token offerings mean opportunities with Malaysia serving as a distinct development hub in Web3.
Future Outlook
Looking ahead, Malaysia’s regulatory direction suggests:
- Expanded listings of approved tokens.
- Introduction of rules for tokenized assets, DeFi projects, and stablecoins.
- Greater emphasis on investor education and market transparency.
If these reforms are successfully implemented, Malaysia could emerge as one of Asia’s most progressive, Shariah-compliant crypto markets by 2026.
Conclusion
The trend that can be traced in Crypto Regulations in Malaysia 2025 is obvious: the government prefers innovation without leaving risks uncontrolled. Having Shariah-related frameworks, enhanced AML regulation, and an increasingly busy market, Malaysia is gradually issuing a potent basis of sustainable a long-tern adoption of crypto.