Malaysia Proposes Streamlined Digital Asset Exchange Rules

Malaysia's Securities Commission (SC) has published a consultation paper proposing significant enhancements to its Digital Asset Exchange (DAX) framework, following record trading volumes that reached RM13.9 billion ($3.29 billion) in 2024. The proposed changes aim to liberalize asset listings while strengthening operator requirements and investor protections.

The consultation, running from June 30 to August 11, 2025, comes after Malaysia's regulated digital asset market experienced substantial growth, with 2024 trading volumes increasing 2.6 times from the previous year. SC Malaysia has also observed growing interest from conventional capital market intermediaries and institutional investors seeking digital asset exposure.

According to SC Malaysia, since the DAX framework's introduction, the country has seen steady growth in its digital asset industry, with various types of digital assets and services now offered across the capital market. The regulatory evolution reflects the SC's recognition that DAXs play a crucial role in enabling responsible digital asset investment within a regulated environment that promotes fair, transparent, and orderly marketplace conditions.

Hence, the regulator is seeking feedback from a broad range of stakeholders, including digital asset issuers, existing and prospective DAX operators, financial institutions, capital market participants, industry associations, and legal and compliance professionals.

Key Proposed Changes

The consultation paper outlines three primary areas of enhancement to the DAX framework, which was originally introduced in 2019.

The most significant proposal involves liberalizing the framework for digital asset listings by removing the SC's direct concurrence requirement for certain assets that meet minimum criteria. This change aims to accelerate time-to-market for new listings, increase DAX operator accountability, and expand product offerings available to investors.

Enhanced safeguarding requirements would strengthen operational governance and controls for DAX operators, including stricter requirements for client asset segregation. The SC emphasized that governance practices must be commensurate with operational risks.

The proposals also include strengthened financial criteria for DAX operators to ensure stronger operational integrity and resilience. These requirements are designed to instill confidence among capital market participants trading through regulated DAXs.

The proposed enhancements represent Malaysia's effort to balance market competitiveness with robust investor protection as the country positions itself as a regional digital asset hub, SC Malaysia said. The consultation period will allow industry participants to provide input on the regulatory changes before final implementation.