As ML/TF and PF are on the rise, there is a need for public-private partnership ("PPP") between BNM, the Securities Commission ("SC") Malaysia, law enforcement agencies ("LEA") and major financial institutions ("FIs") in the country to promote synergy in efforts to foil ML/TF and PF schemes. We foresee that continuous effort to build trust and transparency through open dialogue and collaboration among supervisory, regulatory authorities, and FIs to accelerate reforms and strengthen institutions, policies, and legal frameworks.
The past decade has seen several structural changes globally in the know your customer (“KYC”) and AML regulations. High-profile ML cases and the penetration of illicit funds into global markets have caught the attention of regulators and the public, and rightfully so.
However, traditional forms of regulation from the fiat world do not reciprocally apply to every aspect of crypto nor the fundamental nature of blockchain technology. To address the challenges of the fast-evolving blockchain ecosystem, global regulators have begun to introduce more stringent financial regulations that further bolster the regulatory system to improve licensing models. Many member states now regulate crypto assets individually.
A recent study by Coinfirm showed that 69% of the 216 crypto exchanges do not have "complete and transparent” KYC procedures in place. We foresee more crypto entities investing in setting up a robust AML/CFT framework and an electronic-KYC (“eKYC”) platform for a more cost-effective customer onboarding.
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