London-based cryptocurrency exchange Luno has just reintroduced itself in Malaysia. We say reintroduce, because the company has just received full approval to operate in Malaysia by the country’s Securities Commission – the first cryptocurrency to do so.
Luno set up operations in Malaysia in 2015, and was already the largest digital asset exchange in the country by 2017 on top of being heavily involved in engagements with regulators surrounding new cryptocurrency regulations.
After re-launching in late October, more than RM2.5 million worth of digital assets have been traded in Luno within the first 10 days. Back in 2017, Luno’s transaction value hit a peak of RM600 million per month, Luno CEO Marcus Swanepoel notes.
He hopes that they will get at least the same number of customers and volume as before their temporary exit from the market.
“We are seeing a revolution in global financial services with the adoption and use of cryptocurrencies but this is not going to be an overnight change. Regulators like the Securities Commission, here in Malaysia, who work with new digital assets and blockchain technology are showing real leadership in the sectors,” says Swanepoel.
“They are opening up the way for investors, traders and individuals in the country to maximise the benefits of a new financial system.”
Adding to that, Luno’s head of Asia, Vijay Ayyar says that Malaysia is a strategic market for the company, with a good amount of successes in the past. “We’re excited to return because we know the impact that cryptocurrencies and new forms of investment can have on Malaysian lives.
“The local government has also been leading the pack putting in place forward-looking regulations that embrace innovation while safeguarding users and providing clarity to the nascent crypto space,” he adds.
While Malaysians have been able to access cryptocurrency exchanges available globally, one that is approved by the Securities Commission has the advantage of introducing more transparent alongside stronger protection for consumers.
Swanepoel says that the approval process serves as a blueprint for further collaboration and innovation with regulatory bodies, with Malaysia serving as a pioneering case study.
“Malaysia as a market has always been at the forefront of cryptocurrency adoption and knows the importance of digital assets in today’s global economy. By working with our clients we aim to make sure they can safely buy, sell and store Bitcoin and Ethereum, as well as future digital assets that are approved by the SC,” Swanepoel notes.
“At present, a lot of digital assets are used for speculation but as their role in exchanging value between entities grows, we know they will become an integral part of business.”
Speaking at the relaunch event, Malaysia Digital Economy Corporation CEO Surina Shukri says that while they don’t know where the future is headed for cryptocurrency, “we should assume that it will head to somewhere exciting. So why not use the opportunity of the early days to learn more and be an early pioneer in a space that is growing very fast?”
Luno foresees that Malaysia will be a big market for the company, with the country’s high banking rates and high broadband penetration being one of the major factors, says Luno Malaysia country manager Aaron Tang.
Speaking to Digital News Asia, Tang says that prior to the SC approval, there was a lot of uncertainty on the regulatory framework. With the clarity, he says that now there is more confidence among investors and businesses to get into cryptocurrrency.
With the full approval, Luno now engages with a trustee, which works similarly to the stock market in that the funds are no longer held by Luno but by an independent trustee. Anyone who wants to get an approval by the Malaysian SC needs to hire a trustee.
“It provides more confidence and security to the investor because they now know that Luno or any company cannot just run away with the funds, as they’re now with the trustee,” says Tang.