Malaysia’s Securities Commission (SC) has recently issued out a warning to the members of the public. This warning is to refrain from using crypto ATMs for the time being, as a surge of scams and money laundering are being worked through these machines.
Warning The Public
The regulator had issued out an official public warning just earlier this week, urging the country’s consumers that crypto ATMs are, in technicality, self-contained crypto exchanges. Thus, the SC warned that these companies need to be first authorized to operate in the country by the regulator.
As it stands now, no crypto atm has been given the needed approval by the SC. What this means is every functioning crypto ATM in Malaysia is operating without the oversight of the country’s regulators so that no assurance can be done in quality or intent.
Risking Own Funds Through Use
As this warning details, the Security Commission warned that anyone who uses these crypto ATMs are exposing themselves to an array of financial risk. These risks include that of financial fraud, money laundering, and more.
The statement stated that it was because of this significant risk to the Malaysian citizens that the SF wanted to remind the public not to deal with individuals or entities that do not have the proper licensing or authorization. The simple matter is that the SC cannot protect its citizens under the Malaysian securities laws if these services aren’t under these laws, to begin with. Thus, anyone who uses it is exposed to an array of risks, the most typical being money laundering and fraud.
Consequences Of Breaking SC Rules
As one would imagine, the SC addressed the companies operating these crypto ATMs directly, urging all of these crypto ATM operators to cease their activities immediately.
The penalties involved in operating an unlicensed ATMs can result in fines of up to RM10 million, ($2.35 million). This is excluding the legal ramifications of operating an exchange without the proper authorizations, which itself can lead to prison time of up to ten years.
The regulator warned that members of the public must first verify whether or not businesses within the country have the authorization to do business in crypto. This must be done before any business should be done with the business in question. The SC has a comprehensive list of companies that have crypto authorization on their website, which they urge their citizens to use.