Crypto Licence in Malaysia

11.06.2025

For fast communication with a consultant

WeChat

Malaysia is a leading destination for crypto businesses in the Asia-Pacific region, with a unique balance between strict oversight and an accessible license process. This makes it a popular destination for both start-ups and mature international projects. Malaysia's clear legislative framework prevents shady platforms from operating, making it a popular destination for regulated and scalable growth.

Malaysia requires special Securities Commission Malaysia (SC) authorization for cryptocurrency companies. This legal model creates additional liability and benefits for applicants, including trust from banks, investors, and customers, while entrepreneurs face fines and criminal prosecution.

This blog post provides a comprehensive analysis of Malaysia's cryptocurrency business regulation, detailing license types, applicants, application requirements, process, required documents, operational and financial obligations, and applicant requirements.

Overview of Malaysia's regulatory environment

In 2019, the government established digital assets as securities, formalizing trading and public offering, making cryptocurrency within the stock market legal field.

The Capital Markets and Services Act (CMSA) has been amended in 2025 to enhance anti-money laundering compliance, tighten internal policies, and introduce technical standards for customer data storage, thereby enhancing the regulatory environment for cryptocurrency companies.

Malaysia's government regulates cryptocurrency through various agencies.

The Securities Commission Malaysia:

Approves companies;
Issues licenses;
Ensures regulatory compliance;
Maintains a public register.

The central bank oversees money circulation and currency regulation.

The Malaysian legal model for processing cryptocurrency licenses requires technical adherence and a transparent internal structure.

Transactions involving digital assets must be:

Traceable;
Customer funds sources identified;
Internal risk management policies documented.

Malaysian cryptocurrency companies should

Comply with reporting regime;
Maintain their platform;
Provide transaction data;
Report on request;
Have dedicated compliance and anti-money laundering officers.

Crypto business registration in Malaysia is subject to strict penalties, including fines, blocked access, and license revokement. Attempts to conceal fund origin or allow anonymous wallets to trade are particularly harshly assessed. Registering a crypto business without prior legal due diligence is a serious risk.

Globally, Malaysia complies with the Travel Rule, obliging companies to share transaction data. This adds technological and legal burdens to crypto-business but also opens access to banking services and international payment systems.

Malaysia's crypto-business environment is characterized by transparency, compliance, and international standards, providing predictable policies and world-class protection for companies willing to perform within white market environment.

Any questions?

Contact our specialists

Types of crypto licences in Malaysia

The choice of the optimal license format is crucial for a successful market entry strategy, and Malaysia offers four types of crypto licenses designed for specific business scenarios, each with unique operational peculiarities.

Issuer

The Issuer model is ideal for projects aiming to issue their own tokens in Malaysia, requiring sound business logic, investor disclosure, whitepaper preparation, and proof of token distribution in accordance with the approved model.

IEO Operator

Conducts Initial Exchange Offerings (IEO), prioritizing services to help other companies raise funding. Their primary role is to verify projects,protect investors' interests, and comply with regulations.

Digital Asset Custodian (DAC)

The DAC is granted to companies offering storage services for digital assets, focusing on IT security, access architecture, and multi-layered control systems to establish trust in the Asian market.

Licence type	Main purpose	Minimum capital	Applicants
Issuer	Issuance and offering of tokens	500 thousand MYR	Startups, fintech projects
IEO Operator	Organisation of initial public offerings	5 million MYR	Platforms for attracting investment
DAC	Storage of digital assets	500 thousand MYR	Custodial services, fintech vaults

Malaysia requires obtaining a crypto license for each business line, and com

Malaysia requires obtaining a crypto license for each business line, and combining multiple activities requires multiple separate licenses, as individual requirements should be followed.

Cryptocurrency licensing in Malaysia is based on a control system where each license restricts businesses to specific functions, such as trading and custodial tasks, preventing DAC and Issuer from engaging in such activities.

To process a cryptocurrency license in Malaysia, analyze the business type and choose the best-fit authorization category. An incorrect approach can lead to regulatory risks, application delays, and rejection. Assess the license's fit with the company's objectives and project structure.

Legal requirements for a company when applying for a crypto licence in Malaysia

To pass through the cryptocurrency licensing process, explore crucial to research the legal requirements beforehand, considering strict conditions. You should establish a local company as a Private Limited Company, as failure to meet these requirements can lead to rejection.

The country’s legislation requires a minimum authorised capital of 5 million Malaysian Ringgit (RM), equivalent to US$1.06 million, for Initial Exchange Offering (IEO) operators.

Other permits entail the minimum capital is RM500,000.

Applicants must have at least two local directors or engage local partners to secure the license, which necessitates additional organizational and financial effort.

You should appoint compliance officers and AML officers to register a crypto currency venture. These officers adhere to anti-money laundering legislation and procedures. The regulator checks the officers' qualifications, including work experience, education, and reputation, to ensure compliance.

The company's operational infrastructure, including its own IT system, certified servers, robust data protection solutions, and internal policies, is crucial to sustain compliance.

Operators face significant costs due to the need for multiple layers of protection, including redundant data centers.

To get the crypto license, applicants must submit documentation detailing their risk management strategies.

Cryptocurrency licensing requirements:

Company registration;
Minimum authorised capital;
Appointment of two local directors;
Availability of compliance and AML officers;
Preparation of IT infrastructure and data protection systems;
Implementation of risk management systems.

Cryptocurrency licence process

The authorisation to get a cryptocurrency license is a complex and detailed process that starts before formal paperwork is submitted. Companies must prepare internal regulations, set up technical systems, and ensure team readiness.

Skipping any step can delay the process or lead to rejection, especially for startups with limited resources.

The application process involves several steps, including a preparatory block, compliance check, and final approval.

Step 1

assumes that the company prepares documentation and infrastructure by collecting corporate documents such as articles of incorporation, bank statements, agreements with key partners, and IT system descriptions. They focus on developing internal policies for compliance, data protection, and risk management, and must provide plans for client fund protection.

Step 2

involves filing with the Securities Commission, which requires mandatory documentation such as questionnaires, business plans, corporate structure schemes, product descriptions, and appointment documents for compliance and AML officers. The license acquisition timeline depends on the quality of the prepared package.

Step 3

involves peer review and audit, where SC conducts legal and financial due diligence, requests clarifications, analyzes internal regulations, and may schedule interviews with management. Additional data may be requested if needed.

Step 4

involves final checks and agreement of terms with the company, ensuring compliance with mandatory requirements, testing IT system performance, and assessing project compliance with regulations.

Step 5

involves getting the license and registering in the register. A positive decision results in the company being included in the official list and starting legally working. However, regular renewal and annual inspections are required.

Malaysia's crypto project licensing terms typically range from 6 to 18 months, depending on project complexity and document quality. Common application mistakes include incomplete packages, incorrect service descriptions, lack of capital proof, and weak internal regulations.

To avoid crypto license rejection in Malaysia, it's crucial to consult legal experts who can adjust internal processes, develop missing policies, train teams, and minimize application rejection risks.

Operational responsibilities of a licensed company

After the authorisation, the company should maintain its status and strictly adhere to the Malaysian regulators' obligations. This includes formal reporting and a comprehensive management system covering all areas of activity, from client work to platform technical operation.

Companies regularly report to the SC, including financial statements, flow of funds reports, digital asset transaction statistics, and special reports demanded by the authorised regulator.

The regulator emphasizes the importance of companies adhering to anti-money laundering procedures, which necessitate the development and implementation of a KYC system, which includes customer verification, fund source verification, transaction monitoring, and automatic transaction detection.

Cryptocurrency company licensing responsibilities in Malaysia:

Maintaining transaction records and customer data;
Preparing and filing regular financial statements;
Conducting annual independent audits;
Appointing AML/CFT compliance officer;
Updating internal regulations and procedures;
Ensuring technical readiness for regulatory inspections.

The quality of financial reports is crucial, as companies must record fund flow and prepare reports in the required format, including transaction types, income sources, and cost structure, to avoid misunderstandings and potential manipulation of data.

The company must conduct annual audits and internal controls, ensuring auditors have access to all internal systems, including digital asset reporting, and commission an independent audit from an independent company.

The regulator may impose multi-million dollar fines and revoke a license completely in the cases of serious or repeated violations.

Obtaining a Malaysian crypto license requires time, a qualified team, and additional financial investments. Maintaining a license is a permanent budget element for sustainable and legal business, and should not be a one-time payment.

Financial planning for a cryptocurrency company in Malaysia

The launch of the crypto project necessitates a careful budget preparation due to legal adheerence and significant financial investments.

Mistakes in calculation will hinder a startup's ability to pass all licensing stages, making financial planning a critical element of strategy and not just a management tool.

To obtain a crypto license in Malaysia, one must calculate one-time costs including state registration fee, legal services, infrastructure audit, and internal documentation development, which can range from USD 20,000 to USD 25,000.

The annual costs of maintaining a cryptocurrency company license in Malaysia include renewal fees, audit fees, team maintenance, IT system maintenance, and subscription fees for specialized KYC/AML software. These costs can range from $50,000 to $100,000 per year, especially for projects with increased infrastructure requirements.

Financial expectations structure:

One-time costs: Licence registration, auditing, internal documentation development;
Operating costs: Key employee salaries, IT system maintenance, mandatory inspections;
Taxes: Income tax (24%), possible dividend distribution taxes;
Hidden costs: Backup system maintenance, employee training, legal advice.

Getting a crypto license requires a minimum share capital of RM5 million, along with proof of the company's sufficient resources to perform during the licence validity.

The regulator may request additional financial guarantees if the business model is considered risky.

Malaysia's crypto company registration allows access to the standard corporate regime with 24% income tax, exemptions and reliefs based on government innovation programs, and has signed double taxation agreements, enabling optimization of payments abroad.

To successfully license a Malaysian cryptocurrency company, investors should budget for more than just licensing costs during the planning stage, reducing project stoppage risks and ensuring credibility with regulators, banks, and partners.

Technical mandatory elements for cryptocurrencies

Malaysian regulations require companies to demonstrate both legal and technical readiness for obtaining a cryptocurrency license, with strict requirements for security, data protection, and operational continuity. This includes building a complex IT infrastructure with mandatory audits and certification, not just purchasing servers or installing standard software.

Malaysia's crypto license requirements include ensuring technical systems comply with international standards, including logging user and employee activities, creating data backup archives, developing disaster recovery plans, and integrating internal access control systems. Cryptoprojects face fewer technical requirements but must protect investor data and ensure transparency of token movements.

Crypto Licensing in Malaysia: key technical obligations:

Implement transaction logging system for auditing;
Ensure availability of redundant data centres or cloud services;
Certification of IT infrastructure to international standards like ISO/IEC 27001;
Implement internal access control mechanisms and user rights;
Integrate AML/KYC systems for automatic customer verification and transaction monitoring;
Develop a disaster recovery plan;
Encrypt data at all stages of storage and transmission.

Cryptocurrency providers implement and test their operational components with the regulator entitled to request test results, internal security reports, or conduct its own checks. Non-compliance could result in the company losing its license and facing service blockage.

Cryptoprojects must ensure compatibility with local payment gateways and banking systems, requiring API integrations, DDoS protection systems, and financial monitoring tools. They must also demonstrate tokenization follows an approved model and prevent asset allocation manipulation through technical solutions.

Licensing a cryptocurrency company in Malaysia involves both legalities and technological challenges. Companies must budget for infrastructure preparation, a qualified IT team, and certifications to pass audits and join the market.

Strategic advantages of crypto business in Malaysia

Entrepreneurs must carefully consider jurisdiction when deciding on a cryptocurrency company location. Malaysia offers a combination of strict regulation and a favorable business environment, making it a top choice for crypto projects looking to enter the international market, making it a strategic choice for Southeast Asia.

The country’s political stability and robust regulation set it apart from its neighboring countries, where the legal environment is frequently changing. This stability is particularly crucial for long-term planning projects, as entrepreneurs can rest assured that the rules of the game will not change suddenly.

Southeast Asia's geographical and economic attractiveness, particularly Malaysia's proximity to Singapore, Indonesia, Thailand, and Vietnam, provides access to vast markets and a growing demand for digital financial instruments. The country also actively participates in international economic alliances, facilitating cross-border settlements and foreign counterparty interactions.

Malaysian-licensed companies can establish partnerships with Asian markets, integrating payment services, cryptocurrency platforms, and fintech startups, thereby gaining access to the region.

Malaysia's tax regime for cryptocurrencies is competitive, with a 24% corporate tax rate, lower than many European and Asian countries. Special support programs for startups and fintech companies, including grants for research and development, provide incentives for companies to thrive.

Malaysia offers a lucrative launch pad for entrepreneurs seeking cryptocurrency licenses due to its tax and regulatory environment, as well as the government's investment in the digital economy and blockchain technology development.

Obtaining a crypto licence fulfills regulatory requirements and opens doors to a fast-growing international market.

Practical advice and guidance from a lawyer

Start-ups often mistakenly believe that meeting formal requirements will speed up the licensing process, but this is not always the case. Legal support for crypto projects in Malaysia is often necessary for success, with specialized lawyers helping avoid mistakes at all stages, from document preparation to regulator inspection.

Professional counsel is crucial for cryptocurrency licensing in Malaysia, as regulators expect applicants to know laws and apply them correctly. A lawyer's assistance ensures a solid foundation, eliminates weaknesses in the dossier, and prepares answers to potential queries in advance, laying a solid foundation for successful application.

Legal advice involves audit of all internal documentation and step-by-step support, as incorrect descriptions of services, confusion in the corporate structure, or inconsistencies in beneficiary information can lead to rejections.

The weak point is the interaction with local banks, who often request additional guarantees before opening an account.

Experienced consultants will help you acquire the license by providing recommendations, explanations, and participating in negotiations to minimize bureaucratic barriers.

Acquiring a Malaysian crypto license is just the first step. To scale, a corporate structure must be built in advance, considering factors like share distribution, tax model selection, market entry plans, and integration with foreign platforms. This includes considering the optimal tax model, market expansion plans, and foreign platform integration.

Preparing a crypto license application in Malaysia is time-consuming and should be done carefully, with extra weeks spent checking details to avoid lengthy correspondence with regulators. Companies that work with professionals and follow a plan can reduce licensing time by 3-6 months.

Conclusion

Malaysia's crypto license is more than just a work permit; it provides a solid legal and business foundation for sustainable development. With transparent rules, developed infrastructure, and clear requirements, it's one of Southeast Asia's most attractive jurisdictions for crypto businesses.

Launching a crypto project in Malaysia requires significant investment, time, and a professional team to navigate licencing stages. A comprehensive approach can prevent bureaucratic delays, regulatory misunderstandings, and rejection. Success in projects is often determined by the business idea and the competent structure of the preparation process, as it ensures a smooth transition and avoids potential issues.

Legal support is crucial for Malaysian crypto businesses to succeed. Qualified lawyers assist in preparing documents, establishing communication with regulators, and developing strategies to ensure compliance with regulations, minimize risks, and open international markets. Involving experts early in the licensing process can help avoid mistakes and expedite business launch, making it a valuable investment for those ready to start the licensing process.