Cryptocurrency in Malaysia, like most other countries, straddles a gray area between outright prohibition and inferred acceptance
13 Jan, 2018THEMALAYMAILONLINE.COM
The Inland Revenue Board (IRB) here has suspended the bank account of Luno, a London-based cryptocurrency exchange, pending a tax investigation on its users.
The Edge Markets reported that the globally-recognised company, whose account is held under its local entity’s name — BitX Malaysia — has not been able to process cash deposits or withdrawals in the county over recent weeks.
Luno said in a statement that the tax authority is seeking information on all its Malaysian users, including their identities and complete details of their transactions.
“We will only provide personal information where we are legally required to do so and are working with our local advisers to ensure that any disclosure is consistent with our obligations to you, our customers,” the firm said in a statement sent to the news outlet.
The Edge Markets said that Luno also strongly encouraged all of its customers to abide by Malaysian tax regulations, including declaring any gains that are required by the agency’s income reporting rules.
The firm sought to allay concern among its users by saying that it was still accepting transactions and that their funds “remain safe with Luno”.
Cryptocurrency in Malaysia, like most other countries, straddles a gray area between outright prohibition and inferred acceptance.
Bank Negara Malaysia has said such virtual currencies are not legal tender in Malaysia, but has stopped short of saying it will restrict their use.
Users have urged the central bank to regulate cryptocurrencies via an official exchange, which BNM said it will not do, but will instead introduce new regulations to make these subject to the country’s laws against money laundering.
The unregulated nature of cryptocurrencies has heightened concern about the risks of fraud, as demonstrated by the Securities Commission’s recent order prohibiting the CopyCash firm from proceeding with an “initial coin offering”.
This article was first published on The Star Online