MSTR Cat

Crypto Law/Level VIII · Around the world/8.3 Asia and the Gulf/Lesson 5

Malaysia

Malaysia regulates crypto as securities through the Securities Commission, has acted against large offshore exchanges, taxes only trading-type gains, and faces an unusual enforcement problem: electricity stolen for mining.

Education, not legal, tax or investment advice. Crypto law differs between countries and states and changes often. Check the current rules where you live with a qualified lawyer or tax adviser before you act.

The lean path

The cheapest, lowest-tax, simplest and most private route the law allows, best first. Each step names the rule it rests on and the condition that keeps it lawful.

  1. An individual’s capital gains on digital currency are outside Malaysia’s capital gains tax, which since 1 January 2024 applies only to companies, LLPs, trust bodies and co-operatives. Catch: gains of a revenue nature, such as trading, are taxable income.
  2. Buy only through a locally registered exchange; in October 2026 the Securities Commission listed five: HATA Digital, Luno Malaysia, MX Global, SINEGY DAX and Kinetic DAX. Catch: a foreign group’s global licence does not count, as the Binance and Bybit actions show.
  3. If you do trade as a business, the Inland Revenue Board’s December 2025 guidelines tax profits under paragraph 4(a) but allow trading losses to be deducted. Catch: keep records showing whether each disposal was investment or trading.
  4. For Shariah-compliant holdings, from 30 March 2026 an exchange needs the Shariah Advisory Council’s endorsement to offer a Shariah-compliant digital currency. Catch: endorsement concerns religious compliance, not tax or investment risk.

MaterialsThe Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019, P.U.(A) 12/2019The Securities Commission’s digital assets page, with its list of registered exchanges, token-offering platforms and custodiansThe Inland Revenue Board’s Guidelines on Tax Treatment on Digital Currency Transaction (second edition, 5 December 2025)

Wonder

  1. Is bitcoin a security in Malaysia?
  2. Can someone in Malaysia legally use a large overseas exchange?
  3. Does Malaysia’s capital gains tax reach crypto?

Explore

  1. Malaysia chose a securities route rather than a payments one. The Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019 took effect on 15 January 2019. It prescribes digital currencies and digital tokens that meet its conditions as securities for the purposes of the Capital Markets and Services Act 2007 (CMSA). That gave the Securities Commission Malaysia (SC) power to issue its Guidelines on Digital Assets and to require every digital asset exchange (DAX) to register as a recognised market operator. A label of ‘security’ here is a regulatory tool, not a statement that each coin is an investment contract.
  2. The SC keeps a short public register. In October 2026 its digital assets page listed five registered exchanges: HATA Digital, Luno Malaysia, MX Global, SINEGY DAX and Kinetic DAX. It also listed two operators of initial exchange offering platforms, Kapital DX and Pitch Platforms, and three digital asset custodians. The SC’s Shariah Advisory Council reviews digital currencies, and from 30 March 2026 an exchange that wants to offer a Shariah-compliant digital currency needs the Council’s endorsement. Because the register is short, the quickest test of whether a platform may serve Malaysians is whether its local entity appears on it. A foreign group’s global licence does not count.
  3. The SC has acted against the largest offshore names. On 30 July 2021 it announced enforcement action against Binance entities in the Cayman Islands, the United Kingdom, Lithuania and Singapore and against chief executive Zhao Changpeng, for operating an unregistered DAX in Malaysia under sections 7(1) and 34(1) of the CMSA. Binance had been on the SC’s Investor Alert List since July 2020. The SC directed it to disable its website and mobile apps in Malaysia within 14 business days, to stop all media and marketing activity, and to restrict Malaysian investors from its Telegram group. The order targeted access and marketing, not users.
  4. The pattern repeated with Bybit. On 27 December 2024 the SC said it had reprimanded Bybit Technology Limited and its chief executive, Ben Zhou, for operating a DAX in Malaysia without registration under section 7(1) of the CMSA. It directed Bybit to disable its website and apps in Malaysia within 14 business days from 11 December 2024, to stop sending advertisements to Malaysian investors, and to close its Telegram support group for Malaysians. The SC reported that Bybit had complied. The lesson for a builder is that serving a country through an app and a local-language chat group is enough to be treated as operating there.
  5. Tax depends on the nature of the gain. The Inland Revenue Board’s guidelines, first issued on 26 August 2022 and replaced on 5 December 2025, tax revenue gains under paragraph 4(a) of the Income Tax Act 1967, so a business that buys and sells digital currency is taxed like a trader in stock and can deduct losses. Capital gains are different. Malaysia’s capital gains tax, in force from 1 January 2024 under the Finance Act (No. 2) 2023, applies only to companies, limited liability partnerships, trust bodies and co-operatives, and for movable property in Malaysia only to unlisted shares. Capital gains on digital currency that are not revenue income are therefore outside it.
  6. Malaysia’s most distinctive enforcement problem is physical. In November 2025 the energy ministry told Parliament that 13,827 premises had used electricity illegally for crypto mining, mostly bitcoin, between 2020 and August 2025, causing losses of RM4.57 billion to the national utility, Tenaga Nasional. That is electricity theft, whatever the legal status of the coins mined. A practical check for anyone dealing with Malaysia: confirm the platform’s local entity is on the SC register, keep records showing whether each disposal is investment or trading in line with the Inland Revenue Board’s factors, and treat a host offering cheap mining power as a warning sign.

Key facts

  • Malaysia’s Digital Currency and Digital Token Order 2019 took effect on 15 January 2019 and prescribes qualifying digital currencies and tokens as securities under the Capital Markets and Services Act 2007.
  • Digital asset exchanges in Malaysia must be registered with the Securities Commission as recognised market operators.
  • On 30 July 2021 the Securities Commission Malaysia announced enforcement action against Binance for operating an unregistered digital asset exchange in Malaysia.
  • The Securities Commission Malaysia reprimanded Bybit and its CEO Ben Zhou in December 2024 for operating a digital asset exchange in Malaysia without registration.
  • Malaysia’s Inland Revenue Board says capital gains from disposing of digital currency that are not revenue income are not subject to its capital gains tax.
  • Malaysia’s energy ministry reported RM4.57 billion in electricity losses from illegal crypto mining at 13,827 premises between 2020 and August 2025.

Exercise nine, six, three, one

9CollectList up to 9 facts about a crypto platform or activity someone in Malaysia might use: where it is registered, how it markets, how gains arise, and what power it uses.
6ClusterSort them into 6 groups: registration with the SC, marketing to Malaysians, custody, Shariah status, tax character of gains, and physical or energy risks.
3DistillReduce the 6 to 3 checks that would most quickly show whether the activity is lawful.
1CrystallizeWrite 1 sentence explaining why Malaysia’s capital gains tax does not reach an individual’s long-term crypto investment.

Fact check

Dates, figures and claims checked against the published sources listed below.

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