The Securities Commission Malaysia has warned members of the public not to use digital currency ATMs, after a spate of scams and money laundering through the machines.
The regulator issued a public warning earlier this week, telling consumers that firms operating digital currency ATMs are technically operating digital asset exchanges, which need to be authorized by the regulator.
At present, the commission has yet to approve any digital currency ATMs, meaning those that do exist are operating without appropriate regulatory oversight.
According to the warning, the Securities Commission said this exposes those who use them to a variety of financial risks, including money laundering and fraud.
“As such, we wish to caution and remind members of the public not to deal with unlicensed or unauthorised entities or individuals. Those who do so are not protected under the Malaysian securities laws and are exposed to various risks, including fraud and money laundering.”
Speaking directly to those running digital currency ATMs in the country, the Securities Commission was unequivocal.
“All unauthorised Crypto ATM operators need to immediately cease their activities.”
Penalties for operating an unlicensed ATM including fines of up to RM10 million (US$2.35 million), with imprisonment of up to 10 years for anyone convicted of running an exchange without authorization.
According to the regulator, members of the public should verify whether digital currency businesses are registered and authorized before engaging, with a full list of authorized companies available on the Securities Commission website.
Investors are also being asked to report any suspicious operators to the regulator, including instances of unsolicited contact by phone or by email. In particular, the Commission said investors should be wary of schemes offering high returns with apparently limited risks.
The warning is the latest note of caution around digital currency businesses, with high numbers of scams and unregistered investment schemes continuing to operate illegally.
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