Professional Documents
Culture Documents
PD Digital Currency
PD Digital Currency
PD Digital Currency
Table of Contents
PART A OVERVIEW
1. Introduction
1.2 In June 2014, the Financial Action Task Force (FATF) released the report
entitled “Virtual Currencies – Key Definitions and Potential AML/CFT
Risks” and subsequently in June 2015, a Guidance for a Risk-Based
Approach for Virtual Currencies was issued to explain the application of
the risk-based approach (RBA) to anti-money laundering/counter
financing of terrorism (AML/CFT) measures in the digital currencies
context, identify the entities involved in digital currencies and clarify the
application of relevant FATF recommendations to convertible digital
currency exchangers, which are more likely to present money laundering
and terrorism financing (ML/TF) risks.
1.5 This document sets out the minimum requirements and standards that a
reporting institution must observe to increase the transparency of
activities relating to digital currencies and ensure effective and robust
AML/CFT control measures are put in place to mitigate risks that
reporting institutions may be used as conduits for illegal activities. The
requirements and standards will also support law enforcement activities.
1.6 The Bank reiterates that digital currencies are not recognised as legal
tender in Malaysia. Members of the public are therefore advised to
undertake the necessary due diligence and assessment of risks involved
in dealing in digital currencies or with entities providing services
associated with digital currencies.
1.7 Nothing in this document shall be taken to indicate the Bank’s licensing,
authorisation, endorsement or validation of digital currencies or any
entities involved in providing services associated with digital currencies.
Accordingly, dealings in digital currencies are not covered by prudential
and market conduct requirements applicable to licensed and authorised
activities, or by established avenues for redress in the event of complaints
or losses and damages incurred by parties dealing in digital currencies.
2. Scope
2.1 Pursuant to the AMLA, any person carrying on the activities listed in
Paragraph 4.1 must comply with requirements in this document relating
to:
(a) the identification and verification of customers and beneficial
owners, on-going monitoring of customers’ transactions, sanction
screening, suspicious transaction reporting and record keeping;
(b) transparency obligations; and
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Department – Digital Currencies (Sector 6)
(c) requirements for the submission of data and statistics to the Bank
for the purpose of managing ML/TF risks.
3. Legal Provisions
4. Applicability
4.2 For the avoidance of doubt, any person carrying on the activities listed in
Paragraph 4.1 is subject to this document, regardless that the person does
not have physical presence in Malaysia.
4.3 Where a reporting institution is subject to more than one AML/CFT policy
issued pursuant to section 83 of the AMLA, the more stringent
requirements shall apply.
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Department – Digital Currencies (Sector 6)
5. Effective Date
5.2 The Bank is committed to ensure that its policies remain relevant and
continue to meet the intended objective. Accordingly, the Bank will review
this document within five (5) years from the date of issuance or the Bank’s
last review, and where necessary, amend or replace this document.
6.1 The terms and expressions used in this document shall have the same
meanings assigned to them in the AMLA, unless otherwise defined in this
document.
“beneficial owner” Refers to any natural person(s) who ultimately owns or controls
a customer and/or the natural person on whose behalf a
transaction is being conducted. It also includes those natural
persons who exercise ultimate effective control over a legal
person or arrangement.
S 7.2 A declaration under Paragraph 7.1 shall be made to the Bank in the
manner specified in Annex 1 of this document.
S 7.3 A reporting institution shall notify the Bank within five (5) working days
if it becomes aware of:
i. Any change that materially affects any information previously
provided to the Bank;
ii. Any information or document provided to the Bank that is
materially incorrect or misleading.
8. Risk-Based Application
On Legal Persons
S 9.3.7 For customers that are legal persons, reporting institutions
are required to understand the nature of the customer’s
business, its ownership and control structure.
10.1 General
S 10.1.1 The requirements set out under this Paragraph are applicable
to family members or close associates of all types of PEPs.
S 11.1 Reporting institutions are required to identify and assess the ML/TF
risks that may arise in relation to the development of new digital
currencies, products, services and business practices, including new
delivery mechanisms, and the use of new or developing technologies
whether for new or existing solutions.
S 12.2 The ultimate responsibility and accountability for CDD measures shall
remain with the reporting institution relying on the third parties.
G 12.6 Reporting institutions may obtain an attestation from the third party to
satisfy itself that the requirements in Paragraph 12.6 have been met,
provided there is no evidence or indications to the contrary. Reporting
institutions should take additional measures to satisfy itself of the
requirements if such contrary evidence or indications exist.
G 12.7 Reporting institutions may obtain written confirmation from the third
party that it has conducted CDD on customers or beneficial owners, in
accordance with Paragraph 9.
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Department – Digital Currencies (Sector 6)
S 13.2 Where ML/TF risks are assessed as higher risk, reporting institutions
are required to conduct enhanced CDD for business relationships and
transactions with any person from countries identified by the FATF or
the Government of Malaysia as having strategic AML/CFT deficiencies
and have not made sufficient progress in addressing those
deficiencies.
S 14.2 In the event of failure to comply with the CDD requirements, reporting
institutions must consider lodging a suspicious transaction report
under Paragraph 18.
S 15.2 The MIS shall be commensurate with the nature, scale and complexity
of the reporting institution’s activities and ML/TF risk profile.
G 15.5 The MIS may leverage on and be integrated with the reporting
institution’s existing information systems that support its business
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Department – Digital Currencies (Sector 6)
S 16.2 Reporting institutions must keep the records for at least six years
following the date of completion of the transaction or the date of
termination of the business relationship.
S 17.2 The Compliance Officer shall act as the reference point for AML/CFT
matters within the reporting institutions.
S 17.3 The Compliance Officer must have sufficient stature, authority and
seniority within the reporting institutions to participate in and be able to
effectively influence decisions relating to AML/CFT.
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Department – Digital Currencies (Sector 6)
S 17.4 The Compliance Officer is required to be “fit and proper” to carry out
his AML/CFT responsibilities effectively.
S 17.6 The Compliance Officer must have the necessary knowledge and
expertise to effectively discharge his roles and responsibilities,
including being informed of the latest developments in ML/TF methods
and counter measures to mitigate ML/TF risks.
S 17.9 Reporting institutions are required to ensure that the roles and
responsibilities of the Compliance Officer are clearly defined and
documented.
Mail : Director
Financial Intelligence and Enforcement
Department
Bank Negara Malaysia
Jalan Dato’ Onn
50480 Kuala Lumpur
(To be opened by addressee only)
Fax : +603-2691 6108
E-mail : str@bnm.gov.my
S General
20.1 A reporting institution shall comply with requirements specified by the
Bank in Annex 4 to submit data and statistics to the Bank for the
purpose of the Bank’s assessment, monitoring and management of
ML/TF risks.
S 20.4 Reporting institutions must publish the prices of the digital currencies
exchanged, including the pricing methodology used in determining the
prices for the exchange of digital currencies.
S 20.5 The Bank may publish any non-proprietary information submitted under
Paragraph 20 to promote transparency of digital currencies activities by
reporting institutions and to inform assessments by the public of the
risks associated with digital currencies activities.
S 20.6 Reporting institutions shall submit its annual financial statement to the
Bank within 30 days of the financial year-end.
21. Non-Compliance
RAHSIA Annex 1
Please send completed form to:
Financial Intelligence & Enforcement Department
Bank Negara Malaysia
Jalan Dato' Onn, 50480 Kuala Lumpur
Fax : 03-2693 3625 E-mail : dceaml@bnm.gov.my
DECLARATION FORM
DIGITAL CURRENCY EXCHANGERS
a This report is made pursuant to the requirement in section 7 of the Anti-Money Laundering, Anti-Terrorism
Financing and Proceeds of Unlawful Activities Act 2001 (AMLA) - Digital Currency (Sector 6).
b This declaration shall be submitted under oath.
c Under section 24 of the AMLA, no civil, criminal or disciplinary proceedings shall be brought against a
person who makes a report unless it was made in bad faith.
d By submitting this form, you hereby agree that Bank Negara Malaysia (BNM) may utilise and disclose your
personal data provided in this form, for ensuring transparency of digital currency business and provision of
service under the AMLA.
e The information in this declaration form shall be updated by the reporting institutions, when necessary.
PART A: INFORMATION ON REPORTING INSTITUTION
Name of reporting institution
As per registration name with the Companies Commission of Malaysia
Business information
Business registration no.
1. Name (Shareholding)
Shareholder name 2.
3.
All reporting institutions
Business address
Contact number
Email address
Related foreign entity Yes No
Registered Name (Country), Business Registration Number
Registered name of foreign entity 1.
2.
Social media Tick and specify group name (where applicab le)
Telegram
Whatsapp
Others (please specify)
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Department – Digital Currencies (Sector 6)
Key responsible person
Name of key responsible person
Identification number
Nationality
Please append photo
Address of key responsible
person
Compliance Officer
Name of key responsible person
Identification number
Nationality
Annex 2
Examples of Transactions That May Trigger Suspicion
2. Transactions that require the use of complex and opaque legal entities and
arrangements.
Annex 3
RAHSIA
Please send completed form to:
Financial Intelligence & Enforcement Department Reference no :____________________
Bank Negara Malaysia
Jalan Dato' Onn, 50480 Kuala Lumpur
Fax : 03-2693 3625 E-mail : str@bnm.gov.my
Customer
1) Individual
Nationality
Name
Other/previous (1)
name
(2)
(3)
Contact information
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Department – Digital Currencies (Sector 6)
RAHSIA
Reference no :
Email address
Contact no - (Off) - (Res) - (Mob)
Fax no
Employment information
Business/
employment type
Occupation
Occupation description
Employer name
Employment area
Other known
employment
Marital information
Marital status
Spouse name
Spouse identification
New NRIC no Old NRIC no
(3)
RAHSIA
Reference no :
Contact information
Residential/business address Correspondence address
Email address
Contact no - (Off) - (Res) - (Mob)
Fax no
Employment information
Business/
employment type
Occupation
Occupation description
Employer name
Employment area
Other known
employment
Marital information
Marital status
Spouse name
Spouse identification
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Department – Digital Currencies (Sector 6)
RAHSIA
Reference no :
Others (please
specify)
Description of
suspected criminal
activity
Date of reporting
Where transactions involve digital currencies, the following information should also be included in the
suspicious transaction report:
i. the type of digital currency involved and the number of digital currency units;
ii. the equivalent total amount of digital currency in ringgit;
iii. the Internet Protocol (IP) address information of all parties to the transaction, where possible;
iv. the social media identifiers of all parties to the transaction, where possible;
v. the unique identifiers relating to the digital currency wallet or its equivalent of all parties to the
transaction, where possible;
vi. the unique identifier, reference number, transaction hash or its equivalent of the suspicious
transactions, where possible;
vii. the unique device identifiers of all parties to the transaction, where possible; Unique device identifiers
include Media Access Control (MAC) addresses, International Mobile Equipment Identity (IMEI),
International Mobile Subscriber Identity (IMSI) numbers, secure element ID (SEID) numbers, and
other equivalent identifiers corresponding to the device used for conducting the transaction, where
possible.
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Department – Digital Currencies (Sector 6)
RAHSIA Annex 4
Annex 4
Please send completed form to:
Financial Intelligence & Enforcement Department
Bank Negara Malaysia
Jalan Dato' Onn, 50480 Kuala Lumpur
Fax: 03-2693 3625 Email: dceaml@bnm.gov.my
Instructions:
(a) This reporting requirement is applicable to any reporting institution offering services to exchange digital currency either to fiat money or another digital currency, and vice versa,
pursuant to Paragraph 20.1 of the Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) - Digital Currency (Sector 6) document
(b) Statisticsand financial information reported should only capture all transactions involving the provision of services stipulated in part (a) to any user in Malaysia.
(c) The report must be completed on a monthly basis and submitted to Bank Negara Malaysia by the 10th after the end of the reporting month. Should the submission deadline fall on a
weekend or public holiday, the deadline will be moved to the next working day.
(d) For daily average calculations, please use the number of calendar days in the reporting month.
Reporting month
Residential address
(natural persons)
Reporting year
NUMBER OF TRANSACTIONS
Fiat currency Month total Daily average
RM
Fiat currency to reporting DC USD
Other currencies
Conversions involving fiat currency
RM
Reporting DC to fiat currency USD
Other currencies
VALUE OF TRANSACTIONS
Daily average
Daily average
Fiat currency Month total conversion price per
(up to two decimal places)
digital currency unit
Data reported for this section reflects the average number of customer bids for buy and sell positions in queue per day. This is calculated by adding the number of positions
in queue recorded at the end of each day, divided by the number of days during the reporting month. See Appendix to Annex 2 for illustration.
Please specify the purpose of transactions identified as a percentage of: i) total number of transactions; and ii) total transaction value, made through services you have
offered during the month:
TOTAL - - - -
*To provide in USD equivalent. For conversion rates, please use exchange rates quoted on the last day of the reporting month published on Bank Negara Malaysia's website.
For digital currency transactions involving fiat currency conversions, please specify the method of payment used by your customers as a percentage of:
i) total number of transactions; and ii) total transaction value, made through services you have offered during the month:
TOTAL - - - -
*To provide in USD equivalent. For conversion rates, please use exchange rates quoted on the last day of the reporting month published on Bank Negara Malaysia's website.
1) Monthly income and balance sheet statement by the 10th after the end of each reporting month; and
2) Annual consolidated financial statement no later than 3 months after the end of the entity's financial year end period.
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Department – Digital Currencies (Sector 6)
Appendix to toAnnex
Appendix Annex42
Reporting Illustration for Part B, Sections I & II of the M onthly Report on Digital Currency Activity Statistics and Financial Information
The purpose of this section is to provide a simplified illustrative example of mathematical calculations for Part B, Sections I & II of the report.
Scenario
Reporting period: March 2018
NUMBER OF TRANSACTIONS
Fiat currency Month total Daily average
RM 5000 = 5000/31 = 161
Fiat currency to reporting DC USD 3000 97
Other currencies 600 19
Conversions involving fiat currency
RM 4000 13
Reporting DC to fiat currency USD 2000 65
Other currencies 400 13
Conversions involving other digital Other DC to reporting DC 250 8
currencies Reporting DC to other DC 150 5
VALUE OF TRANSACTIONS
Daily average
Daily average
Fiat currency Month total conversion price per
(up to two decimal places)
digital currency unit
NUMBER OF TRANSACTIONS
Fiat currency Month total Daily average
RM 10000 = 10000/31 = 323
Fiat currency to DC USD 6000 194
Other currencies 1500 48
Conversions involving fiat currency
RM 8000 258
DC to fiat currency USD 4000 129
Other currencies 800 26
Conversions involving other digital Other DC to reporting DC 500 16
currencies Reporting DC to other DC 300 10
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Department (AML/CFT) – Digital Currency (Sector 6)
VALUE OF TRANSACTIONS
Daily average
Fiat currency Daily average
Month total conversion price per
(up to two decimal places)
digital currency unit
Data reported for this section reflects the average number of customer bids for buy and sell positions in queue per day. This is calculated by adding the number of positions in queue recorded at the
end of each day, divided by the number of days during the reporting month.